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2016 (11) TMI 453 - AT - Income TaxClaim of depreciation - AO has disallowed the depreciation on the ground that machine has not been put to use in the year under consideration - Held that:- Machine was ready to use in the year under consideration on 15.03.2004 as evident from the testing report which is placed on page 7 of the paper book. In similar facts and circumstances, several courts have decided this issue in favour of assessee. In holding so we find support from the judgment of Hon’ble High Court of Calcutta in the case of CIT Vs. Union Carbide (I) Ltd. [2002 (2) TMI 95 - CALCUTTA High Court ] wherein held Once it is shown that the assessee has put the machinery to use for the purpose of its business, further enquiry about the degree or type of use is not permitted by the language of s. 32-Once the assessee can establish bona fide use of machinery for the purpose of its business, the assessee establishes its right to claim depreciation-. - Decided in favour of assessee Disallowance on account of interested on the borrowed fund and management fees - Held that:- As we have already decided the first ground of appeal of the Revenue in favour of assessee by observing that the impugned machineries were entitled for the depreciation in the year under consideration. As the said equipment was undoubtedly put to use on and from 14.03.2005. The suspicion of the AO that the machines were under trial is unfounded and in contradiction to the documentary evidence in respect of the said installation. The acceptance report and the confirmation on behalf of the seller speaks unequivocally that the machine was in workable condition from 14.3.2005 and under no circumstances, it may be said that it was under trial. This is because of the simple reason that no customer would accept the report from under trial machine at reasonably high cost. Such report may be faulty and unacceptable. So, whatever the AO concluded was not based on fact but was on the basis of his surmise and conjecture Following the same analogy we do not find any reason to interfere in the order of ld. CIT(A) and accordingly, the inter-connected issues raised by Revenue is dismissed.- Decided in favour of assessee Expenditure incurred in repair on rented property - Held that:- We find that assessee was admittedly running its business from rented premises and repair expenses were incurred in the rented premises only. In such circumstances, various courts have decided this issue in favour of assessee. Unabsorbed depreciation carried forward - Held that:- Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. Thus any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. See GENERAL MOTORS INDIA PVT. LTD Versus DEPUTY COMMISSIONER OF INCOME-TAX [2012 (8) TMI 714 - GUJARAT HIGH COURT ]
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