9911796707
TMI Blog2012 (10) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... ital construction equipment acquired by the assessee and kept ready for use by the contractor putting up the power plants of the assessee." 2. The brief facts relating to the references may be noticed. The assesee who is the applicant herein, was incorporated on 7th November, 1975 as a public sector undertaking with the main object of development of thermal power in all its aspects including construction, generation, operation and maintenance of thermal power stations and associated transmission network. The entire construction activity of the thermal power stations was entrusted to various reputed contractors by the assessee. The projects were mammoth in size and in order to enable the contractors to carry out construction work on schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible for depreciation, but all other machineries and equipment which had been bought for the purpose of setting up the three projects were also entitled to the allowance of depreciation, despite not being actually put to use, on the ground that they were kept ready for use. This claim was disallowed by the Assessing Officer in the assessments, whose action was confirmed by the CIT(Appeals) as well as by the Tribunal for both the years under reference. 4. Before the Tribunal the assessee had contended that the income shown by way of hire purchase was properly assessable under the head "profits and gains of business" and it was wrongly assessed under the head "income from other sources". This claim was rejected by the Tribunal, holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was kept ready for use, but not actually used, represented machinery or equipment relating to the power generation which would be installed only after the construction of the projects were completed. The list of machinery and plant on which depreciation was claimed by the assessee shows that all of them related only to the construction work, such as crawler tractors, bulldozers, mobile cranes, coal carriers, road rollers, survey equipment, water tankers, drilling machines, compressors, auto workshop equipment etc. None of the items of machinery represents power generation equipment which was required to be installed only after the construction of the three projects was completed. No such case had been made out by the Assessing Officer who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgments consequently applies to the present references. Certain machinery and equipment were let out on hire to the contractors and they used them in the construction of the projects. Depreciation was allowed in respect of those equipment and machinery under Section 56(ii) of the Act. Some machinery and equipment relating to the construction of the projects were not actually put to use, though they were kept ready for use and this factual position is not in dispute. Moreover, though the Tribunal took the view that the equipment and machinery which was not actually put to use related to the power generation and were to be installed after the construction of the projects was completed, the question referred to this Court for opinion shows th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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