TMI Blog2007 (9) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year, the assessee was entitled to depreciation and allowed the claim. Held that- since the fact that the machine had been kept in readiness for use and would be deemed to have been used within the meaning of the expression contained in section 32 of the Act. - 65 of 2003 and 61 of 2006 - - - Dated:- 19-9-2007 - KULSHRESTHA S. K., SHRIVASTAVA A. K. JJ JUDGMENT The judgment of the court was delivered by 1 . S. K. Kulshrestha J .-Since common questions have been formulated in the above two appeals, which are similar except for the assessment year, both these appeals are being decided by this common order. 2. The questions of law formulated in Income-tax Appeal No. 65 of 2003 are as follows: "(1) Whether the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine was neither sold nor discarded nor demolished, allowed the depreciation disallowed by the Assessing Officer and the Com-missioner of Income-tax (Appeals). It is against this order of the Tribunal that the Revenue has filed this appeal on the questions reproduced herein above which are common to both appeals. 5. Learned senior counsel for the Revenue brought to our notice the pro-vision contained in section 32 of the Income-tax Act, 1961, to buttress his argument that unless the machine, on which depreciation can be claimed, has been used, the assessee does not become entitled to depreciation. Sec-tion 32(1)(i), (ii) of the Income-tax Act, 1961, reads as extracted below : "Depreciation.-(1) In respect of depreciation of- (i) buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the view that when the machine is kept ready for use, the assessee is entitled to depreciation on the principle of passive user. Similar view of the Delhi High Court in CIT v. Refrigeration and Allied Industries Ltd. [2001] 247 ITR 12 has been pressed into service. 8. The impugned order of the Tribunal has taken the view that if the asset is not sold, discarded or demolished or destroyed during the previous year, the assessee becomes entitled to depreciation. In this view of the matter, the Tribunal has allowed the depreciation on the Tetrapack machine of the assessee. Since keeping the machine in readiness is a finding of fact, we have to proceed on the assumption that the Tetrapack machine of the assessee was kept in readiness for us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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