Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Stitchwell Qualitex (RF) Versus Income Tax Officer & Another

2015 (9) TMI 850 - DELHI HIGH COURT

Entitlement to depreciation claimed in respect of Unit-II - AO held that the Assessee failed to prove that it had undertaken any manufacturing activity during the AY in question - CIT(A) allowed claim - Held that:- On facts, it is not in dispute that the building was constructed in the previous year 1988-89. Further, the plant and machinery was installed in the factory in the previous year ending 31st March 1990. The Court in of the view that the installation of the plant and machinery in the bu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ilding and plant and machinery were not for the purpose of business of the Assessee. Therefore, it is concluded that the building and machinery in Unit II were used for the purpose of the business of the Assessee during the AY in question. - Decided in favour of assessee. - ITA 346/2002 - Dated:- 16-9-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr. S. Krishnan, Advocate For the Respondents : None ORDER 1. This appeal by the Assessee, Stitchwell Qualitex (RF), under Section 260 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee is a registered firm carrying on business of manufacturing bag stitching machines in a factory situated at Noida since 1981. In the year 1987 the Assessee applied for and was allotted plot No. A-11, Sector-57, Noida. It constructed a factory building thereon in the accounting year ending 31st March 1989 (AY 1989-90) and the cost of the factory building was ₹ 9,77,775.58. Machinery worth ₹ 1,10,825 was installed in the said factory (styled Unit II) in the previous year 1989-90. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-II; (ii) purchases made for Unit-II are only ₹ 361.70; (iii) no expenses under any head have been claimed; (iv) all the wages payments and official documents showed that no manufacturing activity took place; (v) no separate staff was engaged and (vi) no power bill has been received. The AO held that the Assessee failed to prove that it had undertaken any manufacturing activity during the AY in question. 5. The Commissioner of Income Tax (Appeals) [ CIT (A) ] however accepted the plea of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eved with the above order of the CIT (A), the Revenue went in appeal before the ITAT. The ITAT referred to the decision of the Supreme Court in Federation of Andhra Pradesh Chambers of Commerce and Industry v. State of Andhra Pradesh [2001] 247 ITR 36 (SC) and concluded that in order to claim depreciation, it is important, inter alia, that the asset must be actually used for the purpose of business. Accordingly, it was held that the CIT (A) was not justified in granting depreciation. 7. This Cou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es of the business. The Court on the facts of the said case rejected the stand of the Revenue that the machinery and equipment had to be put to actual use and that it would not be enough if they were "kept ready for use". The Court referred to a large number of decisions of the High Courts which held that the expression "used for the purpose of business" in Section 32 of the Act was interpreted to include a case where the asset is kept ready for use but is not actually put to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version