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2016 (1) TMI 663

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..... ssets from 1/4/2005 to 31/3/2006 the same was annexed to the written submission by the assessee and the date of induction furnace was installed on 25/4/2005.Though, the security deposit was paid on 8/11/2004, the assessee has not claimed any depreciation in the earlier year. Therefore, the assessee has rightly claimed the depreciation in the year under consideration. The CIT (A) has given a detailed finding to this aspect. Therefore, the CIT (A) has rightly set aside the findings of the Assessing Officer and allowed the deprecation to the assessee. - Decided in favour of assessee - ITA No.4238/Del/2010 - - - Dated:- 15-12-2015 - SV MEHROTRA, AM SUCHITRA KAMBLE, JM For the Petitioner : Shri Om Prakash Meena, Sr. DR For the Res .....

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..... sformer and power panel for the supply of the power of the desired load. This was a dedicated line along with transformer wherefrom the power was drawn exclusively by the assessee for running its induction furnace. The payment was deposited with the Uttar Pradesh Power Corporation Limited, after the deposit of the amount as directed by the Department, the transformer and electric distribution system was installed in the premises of the assessee and the assessee alone had an exclusive right to draw power out of the distribution station installed in the factory premises of the assessee. The Uttar Pradesh Power Corporation Limited maintains control over the power station/distribution lines installed for the assesee for the security reasons and .....

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..... ent made. As per the details submitted, it was observed that the said expenditure pertains to payment made to Electricity Department in the form of security and other charges for installation of power connections for the assessee. 7. The Assessing Officer further observed that by making the above expenditure the assessee has not acquired any ownership rights on the said asset for claiming deprecation the assessee must be the owner of the asset. The Assessing Officer referred the Hon'ble Supreme Court decision in the case of R.B Jodhamal Kuthiala Vs. CIT 1971 182 ITR 570 (Supreme Court) wherein it was held that the real estate to ascertain whether the assessee was entitled to the income from the property and hence the owner must be th .....

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..... m the statement of electrical installations placed on file by the A.R where it is seen that expenses to the tune of ₹ 21,17,034/- were incurred during this period on the construction/installation and commissioning of the machinery for the supply of power connection of 3200 KVA to the industrial unit of the appellant. The connection was released on 22/6/2005 after the sealing report was provided by Uttar Pradesh Power Corporation Limited. I have also examined the first Electricity bill issued by the UPPCL dated 23/8/2005 were also it is clearly mentioned that the new connection is released on 22/6/2005 as per sealing report number 03/27 dated 22/6/2005. I have also considered the submission of the A.R that the entire system is installe .....

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..... a owner for purpose of allowance of depreciation under S. 32 of IT Act. Any narrow interpretation would run counter to the concept of allowance of depreciation. As regards the judgments relied upon by the A.O in his remand report viz. CIT vs. ABC India Ltd. 226 ITR 733, CIT Vs. Bharath Gold Mines Ltd. 192 ITR 639, Tamil Nadu Civil Supplies Corporation Ltd. Vs. CIT 228 ITR 399, CIT Vs. Tamil Nadu Agro Industries Corporation 192 ITR 108, Ram Kumar Mills P. Ltd. Vs. CIT 180 ITR 464 are concerned, in view of the an aforesaid recent decisions including that of the apex court the decisions cited by the A.O may not be applicable now. Further the submission of the appellant regarding treating expenditure for business purpose either under rev .....

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..... 9. The Ld. DR submitted that the Assessing Officer has rightly disallowed the claim of depreciation as there was no ownership established by the assessee company. The Ld. DR further stated that the ownership lies with the Uttar Pradesh Power Corporation Limited. He relied upon the Assessing Officer's order. He stated that the CIT (A) has not taken the Assessing Officer's order in proper spirit hence pleaded that the present appeal to be allowed and Ld. CIT(A) order should be set aside. 10. The Ld. AR submitted that the assessee company has installed induction furnace and the same was reflected in the details of addition of fixed assets from 1/4/2005 to 31/3/2006 the same was annexed to the written submission by the assessee a .....

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