TMI Blog2011 (3) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... had no control with an expectation of resuming the business - Decided in favour of assessee. - I.T.A. No.17 of 2001 - - - Dated:- 31-3-2011 - Mr. Justice Bhaskar Bhattacharya, Justice Sambuddha Chakrabarti, JJ. For the Appellant: Mr. M.P. Agarwal. For the Respondent: Mr. J.P. Khaitan, Mr. Ananda Sen, Mr. A.K. Dey. Bhaskar Bhattacharya, J.: This appeal under Section 260A of the Income-tax Act, 1961 is at the instance of the Revenue and is directed against the order dated 26th June, 2000, passed by the Income-tax Appellate Tribunal, E Bench, Calcutta, in ITA No.2637/Cal/1995, for the Assessment Year 1992-93 thereby setting aside the order of the CIT (Appeals) and granting the benefit of depreciation in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember, 1992 showing loss for the year at Rs.88,93,265/-. In response to a notice under Section 143(2) of the Act, the assessee appeared. The assessee claimed depreciation in the computation of income to the extent of Rs.42,99,917/-. The Assessing Officer disallowed such depreciation on the ground that as the operation of the factory remained suspended during the year, the assessee was not entitled to claim depreciation. Being dissatisfied, the assessee preferred an appeal before the CIT (Appeals). The CIT (Appeals), however, affirmed the order of the Assessing Officer disallowing the claim of depreciation on machinery and plant. Being dissatisfied, the assessee preferred an appeal before the Income-tax Appellate Tribunal and by the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax vs. Oriental Coal Co. Ltd. relied upon by Mr. Agarwal, the assessee himself declared lock out of the factory indicating that he had no intention to run the business and in that context, a Division Bench of this Court held that the machinery was not open to use. Mr. Khaitan contends that in this case, the plant and machinery were ready for being used but for the law and order situation over which the assessee had no control, the machine could not be operated. Mr. Khaitan in this connection places strong reliance upon a Division Bench decision of this Court in the case of Commissioner of Income-tax vs. Union Carbide (I) Ltd. (2002) 290 ITR 353 and contends that the word used occurring in Section 32 of the Act should be giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word used appearing in Section 32(1) of the Act should be given a reasonable meaning. By introducing the said provision, the legislature wanted to give the benefit of depreciation of the plant and machinery purchased by the assessee and used for the purpose of business. The word used should be interpreted to mean a situation where the machineries which are required for implementing the nature of business the assessee runs, have been kept ready for use for the above purpose. In other words, if the assessee purchases a machine which is not required at all having regard to the nature of the business carried on by the assessee, he will not be entitled to the benefit of depreciation because the said machinery is not meant for the use in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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