TMI Blog2004 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... t was delivered by P. KRISHNA J.- The Income-tax Appellate Tribunal, Delhi, at the instance of the Income-tax Department has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion to this court:- "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing the claim of depreciation of Rs. 1,91,917 on the plant and machinery of vegetable ghee unit as these were not actually used for the full year relevant to the assessment year 1977-78?" The assessee is a limited company running a sugar factory, distillery, confectionery and vanaspati units. It did not operate the plant during the accounting year relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory as soon as possible. There was no intention to close the said unit but on account of adverse circumstances, the said unit remained suspended and could not be operated in the year in question. The unit resumed production in the subsequent assessment year i.e., in July, 1978. The apex court while interpreting section 32 of the Act, has held in Mysore Minerals Ltd. v. CIT [1999] 239 ITR 775, that section 32 confers a benefit on the assessee. The provision should be so interpreted and the words used therein should be assigned such meaning as would enable the assessee to secure the benefit intended to be given by the Legislature to the assessee. It is also settled that where there are two possible interpretations of a taxing provision, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued strictly, it can be taken as connoting or requiring the active requirement or actual working of the machinery, plant or building in the business. On the other hand, the wider meaning will include not only cases where the machinery and plant, etc., are actively implied but also the cases where there is what may be described as passive user of the same in the business and the same can be said to be in use when it is kept ready for use. The Delhi High Court in CIT v. Refrigeration and Allied Industries Ltd. [2001] 247 ITR 12, has held that the assessee was entitled to depreciation allowance on the cold storage plant though the machinery had not actually worked during the accounting period. The Punjab and Haryana High Court in CIT v. Pep ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
