TMI Blog2011 (6) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... ts - Held that: the same issue has already been examined by the Tribunal in assessee's own case for the assessment year 1997-98 in which the Tribunal vide order dated 30-6-2000 in ITA No. 3474/M/00 allowed depreciation in identical situation - Decided in the favour of assessee Regarding disallowance of charter hire rentals - High Court in the case of CIT v. Southern Petrochemical Industries Corpn. Ltd. (2008 -TMI - 4489 - MADRAS HIGH COURT) in which it has been held that asset kept as standby was entitled to depreciation - Appeal is allowed - IT APPEAL NO. 1536 (MUM.) OF 2007 - - - Dated:- 8-6-2011 - N.V. VASUDEVAN, RAJENDRA SINGH, JJ. Porus Kaka for the Appellant. Jitendra Yadav for the Respondent. ORDER Rajendra Sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the PE, the asset no longer existed in the block of assets of the PE and therefore, it had to be treated as demolished or destroyed. The assessee was threfore not entitled to depreciation on the asset. The Assessing Officer also observed that depreciation must have been claimed by the assessee in respect of asset transferred. He referred to the judgment of Hon'ble High Court of Calcutta in 64 Taxman 508 (sic) for the proposition that double depreciation was not allowable. The Assessing Officer also referred to Circular No. 740, dated 17-4-1996 of CBDT as per which a foreign branch of foreign company in India had to be treated as separate entity for the purpose of taxation. He, therefore, disallowed claim of depreciation. 2.1 In appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of asset by the PE to the head quarter outside India had to be treated as deemed sale. He therefore directed the Assessing Officer to compute the depreciation treating the asset transferred as sold. Aggrieved by the said decision the assessee is in appeal before the Tribunal. 2.2 Before us the ld. AR argued that the profit attributable to PE had to be computed treating the PE as an independent entity. Therefore, if any asset has been used in the working of the PE, depreciation has to be allowed which is the main item of expenditure in case of the assessee. It was also submitted that the assessee had claimed depreciation only during the year the vessel had been used. It was pointed out that the assessee had been using the vessel at differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on the order of authorities below. 2.3 We have perused the records and considered rival contentions carefully. The dispute is regarding allowability of deprecation in respect of Indian Dredger Vehicle-HAM 924 and plant and machinery while computing income from PE of the assessee company in India. There is no dispute that the assessee has a PE in India and the income attributable to PE is taxable. The only dispute is regarding the allowability of depreciation in respect of assets mentioned above. The assessee during the year had transferred these assets from India. The Assessing Officer, therefore took the view that the assets no longer existed in the block of assets of the PE and have therefore to be treated as demolished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment year 2000-01, revenue filed an appeal before the Hon'ble Bombay High Court in which specific question of law was raised as to whether re-exporting asset outside India for use outside India amounted to discarding the asset of the PE for the purpose of business in India. The Hon'ble Calcutta High Court did not accept the plea of the revenue and upheld the order of the Tribunal. Therefore, in our view the issue raised is covered by the decision of the Tribunal in assessee's own case in assessment year 1997-98 (supra) and assessment year 2000-01 (supra). Respectfully following the decision of the Tribunal (supra) we set aside the order of the CIT(A) and allow the claim of the assessee. 3. The second dispute is regarding disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wable when the asset was ready for use. He referred to the judgment of Hon'ble Madras High Court in the case of CIT v. Southern Petrochemical Industries Corpn. Ltd. [2008] 301 ITR 255 in which it has been held that asset kept as standby was entitled to depreciation. Therefore it was clear that standby period had to be treated as user of the asset. The ld. AR also pointed out that hire charges paid by the assessee had been assessed in case of the recipient and therefore, disallowance could not be made in case of the assessee. It was accordingly urged that the addition made should be deleted. The ld. DR placed reliance on the authorities below. 3.2 We have perused the records and considered the rival contentions carefully. The dispute is re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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