TMI Blog1982 (4) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... at the depreciation allowance should have been made in respect of the building at Chandigarh while computing the business income of the assessee for the assessment year 1971-72 ? " The facts as mentioned in the statement of the case are that the respondent-assessee is an HUF which was carrying on business of a printing press under the name and style of Gemini Printers, Ambala Cantt., during the assessment year 1971-72 (accounting year April 1, 1970, to March 31, 1971). The assessee declared his income as Rs. 58,711. At the time of the assessment before the ITO, the assessee claimed depreciation of Rs. 10,743 in respect of written down value of the factory building at Chandigarh and certain electrical fittings therein. It is not disputed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period November 22, 1970, to Match 31, 1971, i.e., a little over four months. The argument addressed by the learned counsel for the parties revolved around the interpretation of the word " used " occurring in s. 32(1) of the I.T. Act. According to the said provision, an assessee can claim depreciation in respect of the buildings, machinery, etc., owned by the assessee and used for the purpose of his business. Mr. Ashok Bhan, learned counsel for the Revenue, has contended that the word " used " connotes actual user of the building and in support of his argument, he has sought to place reliance upon certain observations in CIT v. Jiwaji Rao Sugar Co. Ltd. [1969] 71 ITR 319 (MP). A reference to the said authority would indicate that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision for raw material would come next. In addition, the legal formalities required under various statutory provisions would have to be complied with and then alone the stage would arrive for the actual functioning of the unit. The procedure referred to above is bound to take considerable time, depending of course upon the nature and capacity of the industry and the capital outlay of the unit. The question which falls for consideration is that after a building has been arranged for housing the proposed industry and the necessary electrical fittings have been carried out, can it be said that the building has not been put to use? After hearing the learned counsel for the parties at considerable length, we find that it is not so. If the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dass, learned counsel for the respondent-assessee has also placed reliance upon the observations in Sarabhai Management Corporation Ltd. v. CIT [1976] 102 ITR 25 (Guj), which are of some assistance to the determination of the point involved in this reference. The case pertained to a private limited company, whose main object was to acquire immovable property and give it out either on lease or licence, for the purpose of residence or business, with all appurtenant amenities including storage, watch and ward facilities, canteens, refreshment rooms, etc. In the said case, the assessee had claimed depreciation in respect of the building and other amenities pertaining to the period in which the building was in the process of preparation for bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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