Case Law Details
Chhatariya Firetech Industries Vs JCIT (ITAT Ahmedabad)
The issue under consideration is whether the depreciation on purchase of New Weaving Looms allowed in case of assessee?
ITAT states that, new Weaving Looms were installed and put to use before the end of the financial year as pointed out before the lower authorities. Consequently, it was claimed that Revenue authorities were not justified and denying the depreciation on the new Looms installed. ITAT find that it is an admitted position that the assessee has purchased new Weaving Looms as per invoice dated 21.12.2009 from M/s. Annpurna Engineering Works. Packing, forwarding and transportation charges of Rs.88,170/- were also found to be incurred on these Looms. The assessee is claimed to have received the Looms on 01.02.2010 as per its accounts. The Revenue has disputed the claim of the assessee for not having put the Looms into use on the date owing to absence of satisfactory evidence. In this regard, we notice that the claim was primarily denied as the assessee could not show purchase of any motor that is required for putting the Looms in motion. It is the case of the assessee that the new Looms were commenced with spare motors. On appreciation of facts in totality, ITAT find the claim of the assessee towards depreciation of new Looms to be maintainable. It is not in dispute that new Looms were purchased during the financial year and were delivered in the premises of the assessee company. The facts and circumstances of the case shows that new Looms were ready for actual use even if it is momentarily presumed that actual productions were not carried out. On the conspectus of facts, where the asset was ready for use, depreciation ought to have been allowed. Be it as it may, the entire exercise is revenue neutral when seen holistically over years and therefore no adverse inference is required to be drawn. The action of the Revenue authorities is accordingly set aside and the claim of the depreciation is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-6, Ahmedabad (CIT(A)’ in short), dated 30.09.2015 arising in the assessment order dated 25.03.2015 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2010-11.
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