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2014 (8) TMI 205 - HC - Income TaxDepreciation on machinery installed in contractors premises – acquisition of machinery contrary to contract terms - Held that:- In order to claim depreciation under Sec.32, the condition to be satisfied is, the assessee should own wholly or partly the machinery used for the purpose of business or profession. Therefore how the machinery is acquired, whether acquisition of machinery is contrary to the terms of the contract between the parties, is totally irrelevant - Assessee has produced documents showing that he owns the machinery - the Assessing Authority seems to think the assessee has to demonstrate before him in the Income Tax office how this machinery is used in manufacturing the products and the same is not produced - asessee is entitled to depreciation as provided u/s 32 of the Act – Decided against Revenue. Nature of asset - Whether the character of the said equipment changes from revenue expenditure to capital asset – Held that:- The machinery given to doctors for demonstration purposes is also a part of promoting sale of the said machinery - It is only on such demonstration, the assessees goods are accepted in the market – Tribunal has rightly recorded that it amounts to revenue expenditure and not capital asset – Decided against Revenue.
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