Case Law Details
DCIT Vs Agile Electric Sub Assembly Pvt. Ltd. (ITAT Chennai)
Admittedly, the assessee has filed a tabular chart explaining date of purchase of machinery and completion of commissioning of such machinery, as per which all the plant and machinery was commissioned before 30.03.2013. The assessee had also placed on record commissioning report for installation and commissioning of plant and machinery . It is also an admitted fact that before Assessing Officer, the assessee has placed on record details of finished goods produced from the new plant and machinery installed and put to use for the relevant assessment year. The learned CIT(A), after considering the relevant submissions of the assessee has recorded categorical finding that assessee has completed installation and commissioning of plant and machinery on or before 30.03.2013. However, concurred with the findings of the Assessing Officer that in one day so many units of finished goods cannot be produced. We find that reasons given by the Assessing Officer to disallow depreciation on plant and machinery is not on sound footing, because it is a well settled principles of law by the decision of the Hon’ble Bombay High Court in the case of Whittle Anderson Ltd. Vs. CIT (supra) that when machinery kept ready for use at any moment from which taxable profits are earned, machinery can be said to be used for business purpose of section 10(2)(vii), the second proviso and depreciation on such plant and machinery can be allowed. The jurisdictional High Court of Madras in the case of CIT Vs. Chennai Petroleum Ltd.(supra) has considered an identical issue and held that where assessee’s business was a going concern and machinery could not be put to use due to raw material paucity beyond assessee’s control, depreciation claimed u/s.32 of the Act could not be denied. The sum and substance of ratio laid down by the above two decisions of Hon’ble High Courts are that even if plant and machinery is not put to use for the relevant assessment year, but was installed and ready for use, then depreciation claim can be allowed on such plant and machinery .
FULL TEXT OF THE ORDER OF ITAT CHENNAI
PER G.MANJUNATHA, AM:
This appeal filed by the Revenue and Cross Objection filed by the assessee are directed against the order of the learned CIT(A)-1, Chennai dated 31.01.2018 and pertains to assessment year 2013-14. Since, facts are identical and issues are common, for the sake of convenience, the appeal filed by the Revenue and Cross Objection filed by the assessee were heard together and are being disposed off by this consolidated order.
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