TMI Blog2007 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... redation for a sum of Rs. 6,90,204.56 in respect of a new unit VSF-III an export oriented unit. On a perusal of the record, the Commissioner of Income-tax found that the machinery pertaining to the VSF-III unit had actually worked for 112 days starting from September 28, 1992, to March 31, 1993. The Commissioner was of the view that as per the proviso to section 32 of the Income-tax Act, the claim of depreciation should have seen restricted to 50 per cent. of the normal depreciation as the asset had actually worked for only 112 days. The excess depreciation of Rs. 2,57,38,370 should have been disallowed. In that view of the matter, the Commissioner regarded the assessment made on March 29, 1996, as erroneous and prejudicial to the interests of the Revenue. A notice under section 263 of the Income-tax Act was issued and upon hearing the representative of the assessee and on finding that the company commissioned the new unit on September 28, 1992, and the assets worked for 112 days, it was held that as per the second proviso to section 32 of the Act, the assessee was entitled to only 50 per cent. of the normal depreciation. On that reason, the Commissioner of Income-tax set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clause in respect of such asset shall be restricted to fifty per cent. of the amount calculated at the percentage prescribed under this clause in the case of block of assets comprising such asset: Provided also that, in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1991, the deduction in relation to any block of assets under this clause shall, in the case of a company, be restricted to seventy-five per cent. of the amount calculated at the percentage, on the written down value of such assets, prescribed under this Act immediately before the commencement of the Taxation Laws (Amendment) Act, 1991." 5. In this case, the claim of the assessee for normal depreciation for the block of assets was restricted to 50 per cent. on the ground that such asset was put to use for a period less than 180 days. Hence, the construction of the expression "put to use" employed in the latter part of the second proviso assumes significance. It is axiomatic that in the absence of definition to a word or an expression, which requires construction, the usual course to be adopted is to assign the meaning given to the word or expression in the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 1961, and subsequent years, the allowance under section 10(2) (vi) of the Act in respect of depreciation of buildings, machinery, plant or furniture shall be at percentage of the written down value or original cost, as the case may be, equal to (i) 100 per cent. ; (ii) fifty per cent. ; or (iii) nil per cent. ; of the number shown in the corresponding entry in the second column of the following statement, according as the buildings, machinery, plant or furniture have been used by the assessee in his business, profession or vocation during the previous year, (i) for a period of 180 days or more, (ii) for a period of less than 180 days but more than thirty days or, (iii) for a period of thirty days or less than thirty days, respectively." 9. In that case, the Tribunal has taken the view that in terms of the amended rule, in order to get depreciation the asset in question must have been actively used for specified number of days in the business of the assessee. The Tribunal had held that since the bus in question having actually plied by the assessee for less than 30 days during the previous year, the assessee would not be entitled to any depreciation in respect thereof. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, in whatever sense that word is taken, at least for a part of the accounting year. If the machinery and plant have not at all been used at any time during the accounting year no allowance can be claimed under clause (vii) in respect of them and the second proviso also does not come into operation." 12. After making a survey of all other earlier cases touching upon the issue starting from N. D. Radha Kishen and Sons v. CIT [1928] 3 ITC 73 (Lahore) ; CIT v. Viswanath Bhaskar Sathe [1937] 5 ITR 621 (Bom), Bhikaji Venkatesh v. CIT [1937] 5 ITR 626 (Nagpur), CIT v. Dalmia Cement Ltd. [1945] 13 ITR 415 (Patna), Liquidators of Pursa Ltd. v. CIT [1954] 25 ITR 265 (SC), Machinery Manufacturers Corporation Ltd. v. CIT [1957] 31 ITR 203 (Bom), State of Madras v. Glenburn Estates Ltd. [1962] 44 ITR 643 (Mad), Niranjan Lal Ram Chandra v. CIT [1963] 49 ITR 177 (All). Whittle Anderson Ltd. v. CIT [1971] 79 ITR 613 (Bom), the Delhi High Court in the case of Capital Bus Service P. Ltd. v. CIT [1980] 123 ITR 404, ultimately held that (page 412) "the survey of the decisions on the subject clearly shows that the consensus of judicial opinion is in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
