TMI Blog2005 (9) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] and the hon ble Calcutta High Court in CIT v. Oriental Coal Co. Ltd.[ 1994 (1) TMI 82 - CALCUTTA HIGH COURT] , which is directly on the point. Further, by merely including an item in the block, will not make it eligible for the depreciation if other conditions for allowability of the claim are not satisfied. Similarly, the Income-tax Appellate Tribunal is not bound to follow legally incorrect decision of the Assessing Officer taken in other years. We respectfully prefer to follow the same on the issue. Hence, we reverse the order of the CIT (A) on this point and restore that of the Assessing Officer. This ground of the Revenue is, therefore, allowed. The limited issue involved in the second ground is whether 50 per cent. disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the company was under lock out since October, 1995. 2. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in deleting the addition of Rs. 98,576 being 50 per cent. of the obsolete stock written off . 2. The facts regarding the first ground are that the Assessing Officer disallowed the depreciation on plant and machinery on the ground that relevant plant and machinery was not put to use during the relevant previous year. It was explained to the Assessing Officer that there was lock out/ strike in the factory which resulted in temporary closure of manufacturing activity. But the assessee-company was not closed down. The company had all the intention to continue with the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the plant and machinery and such other assets during periods of strike or temporary lull fall in the category of passive user and depreciation is allowable. The learned Authorised Representative has cited a series of case law on the point as under : (1) CIT v. Refrigeration of Allied Industries Ltd. [2001] 247 ITR 12 ; [2000] 113 Taxman 103 (Delhi) ; (2) Capital Bus Service P. Ltd. v. CIT [1980] 123 ITR 404 (Delhi) ; (3) CIT v. G. N. Agrawal (Individual) [1996] 217 ITR 250 ; [1994] 75 Taxman 30 (Bom) ; (4) Packwell Printers v. Asst. CIT [1996] 59 ITD 340 (Jabalpur) ; and (5) Inductotherm (India) Ltd. v. Deputy CIT [2000] 73 ITD 329 (Ahd). In view of the facts of the case before me and the case law cited, which supports the appellant s cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this year that the Assessing Officer has disallowed depreciation whereas in other years it was allowed by the Assessing Officer either under section 143(3) or 143(1). He relied on case law cited before the Commissioner of Income-tax (Appeals). 5. We have heard the rival submissions and considered the facts and materials on record including the case laws cited by both the parties. The case laws cited by the learned counsel for the assessee and also relied upon by the Commissioner of Income-tax (Appeals) are no longer applicable in the present case because of clear decision of the hon ble Bombay High Court in Dineshkumar Gulabchand Agrawal v. CIT [2004] 267 ITR 768. In our view, the decision of the Commissioner of Income-tax (Appeals) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming any depreciation. These two conditions are, firstly, that the plant and machinery must be owned by the assessee and, secondly, the plant and machinery must be used for the purposes of business of the assessee. Therefore, under sub-section (1) of section 32, there should be actual user of plant and machinery for the purposes of business. In certain cases of a pooling arrangement or where plant and/or machinery is kept as stand by to provide against break down, even a passive user may entitle the assessee to claim depreciation under section 32 because in both these cases, the machinery is kept ready for use in the factory. Where the factory of the assessee remained under lock-out throughout the two previous years relevant to the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed the written off by 50 per cent. on estimate basis. The assessee had claimed it, as stock had become unusable due to strike/lock out. The Commissioner of Income-tax (Appeals) allowed the entire claim on the ground that factum of obsolescence has been accepted by the Assessing Officer by at least allowing 50 per cent. of the claim. Then there was no reason why the entire claim should not have been allowed. Before us, the learned Departmental Representative could not point out why only half the claim was allowed and not full. The assessee has a justification to write off the stock because there was strike/lock out. Therefore, we do not find any reason to interfere in the order of the Commissioner of Income-tax (Appeals) on this ground. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
