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2019 (11) TMI 145 - AT - Income TaxClaim of depreciation on purchase of new Weaving Looms - HELD THAT:- On appreciation of facts in totality, we find the claim of the assessee towards depreciation of new Looms to be maintainable. It is not in dispute that new Looms were purchased during the financial year and were delivered in the premises of the assessee company. The facts and circumstances of the case shows that new Looms were ready for actual use even if it is momentarily presumed that actual productions were not carried out. On the conspectus of facts, where the asset was ready for use, depreciation ought to have been allowed. Be it as it may, the entire exercise is revenue neutral when seen holistically over years and therefore no adverse inference is required to be drawn. The action of the Revenue authorities is accordingly set aside and the claim of the depreciation is allowed. As regards claim towards transport and labour charges, it is submitted on behalf of the assessee that it has claimed the aforesaid expenses as revenue item whereas the Revenue has capitalized the same to the cost of the new Loom as same has been incurred for the purposes of transportation of new Looms to the factory premises. We do not find error in the action of the Revenue for capitalization of transport expenses. Having regard to the fact that transport and labour charges form part of the actual costs of new Looms, the assessee would thus be allowed benefit of depreciation on this count as well, as claimed in the alternative on behalf of the assessee. AO is accordingly directed to allow depreciation allowance on transport and labour charges component in accordance with law. The claim of the assessee is accordingly allowed in part.
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