TMI Blog2010 (2) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi in appeal No.127/2006-07 dated 21.10.2008 for the Assessment Year 2004-05. Shri N K Chand, Sr. DR represented on behalf of the revenue and Shri C S Aggarwal, Sr. Advocate, Shri Vishal Kalra Shri R P Mall, Advocates represented on behalf of the assessee. 2. It was the submission by the Ld. D.R. that the assessee is in the business of trading of packed fruit juices under the brand name Tropicana . The assessee purchases the packed food juices from M/s. Dynamix Dairy Industries Ltd. Pune (hereinafter referred to as Dynamix ). It was the submission that in the course of assessment, it was noticed that the assessee had claimed depreciation on imported machinery which had WDV as on 01.04.2003 at ₹ 1,41,71,165/- and which was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion the trucks were to be used exclusively for the purpose of the assessee therein which was not the case of the present assessee. It was his further submission that the decision of the Hon'ble High Court of Delhi in the case of Punjab National Bank Ltd. reported in 141 ITR 886 wherein it has been held that only portion used for the business was entitled to depreciation. It was the further submission that the decision of the Hon'ble Supreme Court in the case of Liquidators of Pursa Ltd. reported in 25 ITR 265 would also apply wherein it was held that the machinery plant must be used for the purpose of the business which is actually carried on and the profits of which are assessable u/s 10(1) of the Act. 3. In reply, the Ld. A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it juices as the assessee was originally in the business of manufacture of fruit juices and in 1999 for the firsts time the assessee had for commercial expediency entered into the agreement with M/s. Dynamix for the manufacture of fruit juices. It was also the submission that for the purpose of manufacturing the fruit juices and packing the same as per the requirement of the assessee, certain machinery were required which was not available with Dynamix and consequently Dynamix had requested the assessee to provide the equipment and these equipments have been provided at a cost of ₹ 2,51,93,182/-. It was the submission that as per the agreement between the assessee and the Dynamix, Dynamix could use the machinery only for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if the machinery were not provided by the assessee, Dynamix would not be able to manufacture the products as per the agreement with the assessee and the assessee would not be able to do its business. It was also the submission that the Ld. CIT(A) had specifically called for a certificate from Dynamix to verify if Dynamix were claiming the depreciation and Dynamix had specifically given a certificate that they had no claim over the plant machinery and that they have not claimed any depreciation on the said plant machinery and that the plant machinery was used only for the purpose of business of the assessee. It was also his further submission that the decision of Hon'ble High Court of Bombay in the case of Associated Cement was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hon'ble Supreme Court in the case of Liquidators of Pursa Ltd. shows that the Hon'ble Supreme Court therein has clarified the meaning of the words used for the purpose of business as was available in Section 10(2)(iv) of the I. T. Act, 1922 the term which is used in Section 32 of the I. T. Act, 1961. The Hon'ble Supreme Court has held that the said term means that the machinery plant is used for the purpose of enabling the owner to carry on the business and earn profit in the business. With this meaning in mind if the facts in the present case are seen, it is noticed that the assessee is in the business of trading in packed fruit juices. As per the assessee s product supply agreement entered into by the assessee with Dyna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial amount in the machinery which would remain the liability in the hands of Dynamix if the assessee back out the agreement. It is noticed that the assessee as per the request of Dynamix has provided the machinery for the purpose of manufacturing the products under the Product Supply Agreement. A perusal of the agreement also shows that it is clearly understood that the machinery would belong to the assessee and not the Dynamix and Dynamix had no charge or claim over the machinery. Even the servicing, maintenance and spare parts of the machinery was to be in done in the presence of the representative of the assessee even though the cost for the same was to be borne by Dynamix. Its has also been clearly understood between the parties that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
