TMI Blog1997 (4) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... that beyond that no manufacturing activity was carried because the assessee-company could not obtain any order for supply of goods. However, it was claimed by its letter dt. 4th Feb., 1989 that the assets depreciated and it was also contended that for the purpose of s. 205 of the Companies Act, 1956, the depreciation had to be provided and that similar was the view of the Institute of Chartered Accountants. The AO held that since the plant and machinery were not put to use the assessee was not entitled to depreciation thereon. In support of his contention he relied upon the judgment of the Gujarat High Court in the case of CIT vs. Suhrid Geigy Ltd. (1981) 25 CTR (Guj) 280 : (1982) 133 ITR 884 (Guj). 3. On appeal, the CIT(A) confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted by the authorities below and hence the ratio laid down by the Gujarat High Court in the case of Suhrid Geigy Ltd. is not applicable to the facts of the present case. He submitted that the depreciation is allowable in view of the following authorities: (1) Whittle Anderson Ltd. vs. CIT (1971) 79 ITR 613 (Bom); (2) Capital Bus Service (P) Ltd. vs. CIT (1980) 17 CTR (Del) 155 : (1980) 123 ITR 404 (Del) (3) CIT vs. Vayithri Plantations Ltd. (1980) 19 CTR (Mad) 200 : (1981) 128 ITR 675 (Mad) and (4) CIT vs. Kanoria General Dealers (P) Ltd. (1986) 53 CTR (Cal) 165 : (1986) 159 ITR 524 (Cal). 5. Shri K.K. Kanwat, the learned Departmental Representative strongly supported the orders of the authorities below. He maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o use it actively in the business was not on account of its incapacity for being used for that purpose or its non- availability. In Vayithri Plantations Ltd., the Hon'ble Madras High Court held ``that as the machinery was kept ready for use during the relevant account year but could not be used because of labour unrest, it should be taken that the machinery had been used for the purpose of the business." In Kanoria General Dealers (P) Ltd., the Hon'ble Calcutta High Court has held as under: "Where a business unit has been set up by the assessee which is ready to commence production, the assessee will be entitled to claim deduction of expenditure and the expenditure cannot be disallowed on the ground that the same had been incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the claims of the assessee without placing any relevant material on record. After hearing both the parties, we are convinced that the CIT(A) was justified in restoring these issues to the file of the AO. We accordingly decline to interfere. The grounds are dismissed. 8. The last ground reads as under: "8. The interest under s. 215 is not chargeable. The appellant has asked to not to levy the interest and this means that appellant disputes the levy of interest. The CIT(A) ought to have deleted levy of interest under s. 215 and there is no relevance of decision of Supreme Court Central Provinces Manganese Ore Ltd. vs. CIT (1986) 52 CTR (SC) 112 : (1986) 160 ITR 961 (SC)." 8.1 The AO charged interest under s. 215. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appeal lies against levy of interest as per the judgment of the Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. 8.4 We have considered the rival submissions and perused the facts on record. In the case of Central Provinces Manganese Ore Co. Ltd., the Supreme Court has held as under: "The levy of interest is part of the process of assessment. Although ss. 143 and 144 do not specifically provide for the levy of interest and the levy is, in fact, attributable to s. 139(8) or s. 215, it is nevertheless a part of the process of assessing the tax liability of the assessee. Inasmuch as the levy of interest is a part of the process of assessment, it is open to an assessee to dispute the levy in appeal provided he limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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