ORDER SHEET ITA NO.30 OF 2014 IN HIGH COURT AT CALCUTTA Special Jurisdiction(Income-Tax) ORIGINAL SIDE COMMISSIONER OF INCOME TAX, KOL-IV,KOL. Versus EAST INDIA PHARMACEUTICALS WORKS LTD. BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 16th January, 2015. APPEARANCE: MD.NIZAMUDDIN,ADVOCATE FOR APPELLANT MR.J.P.KHAITAN,SR.ADVOCATE, MR.PRANIT BAG, MR.C.S.DAS, ADVOCATES FOR RESPONDENT Court : appeal is directed against judgment and order dated 22nd November, 2013 by which learned Tribunal dismissed appeal preferred by Revenue concurring with views of CIT (appeals) who had reversed order passed by Assessing Officer refusing to allow depreciation under section 32 on ground that factory was not in operation. learned Tribunal passed impugned order after referring to various judgments including judgment of Supreme Court. At time when appeal was admitted following question of law was framed. 2 Whether on facts and in circumstances of case Ld. Tribunal has erred in law in allowing claim of depreciation and expenses made by assessee on Unit which had not been used for single day throughout year? Md.Nizamuddin, learned advocate appearing for Revenue drew our attention to section 32 of I.T. Act and submitted that there are two conditions before any depreciation can be claimed; a) object must be owned by assessee and b) object must be used for purpose of business or profession. He submitted that factory admittedly was not in operation. Therefore, assessee was not entitled to depreciation under section 32 of I.T.Act. This question has already been answered in favour of assessee by this Court in case of C.I.T. Vs. Norplex Oak India reported in (2011) 198 Taxman 470 wherein word used was interpreted as follows; 14. In our opinion, word used appearing in section 32(1) of Act should be given reasonable meaning. By introducing said provision, Legislature wanted to give benefit of depreciation of plant and machinery purchased by 3 assessee and used for purpose of business. word used should be interpreted to mean situation where machineries which are required for implementing nature of business assessee runs, have been kept ready for use for above purpose. In other words, if assessee purchases machine which is not required at all having regard to nature of business carried on by assessee, he will not be entitled to benefit of depreciation because said machinery is not meant for use in business of assessee. 15. On other hand, assessee doing various manufacturing items may have purchased different machineries having regard to diversity of orders he gets or expects to get. In process, particular type of machinery may be required for finishing particular type of product. If in given assessment year, assessee did not get any order of manufacture of that particular item necessitating use of that particular machinery, for that reason, he should not be deprived of benefit of depreciation of that machinery although same was ready for use whenever order of manufacture of such item would come. 16. In case before us, assessee was ready for doing his business. But for adverse law and order situation, he could not actually run factory although all machineries were ready for use and valuation of such machinery also depreciated 4 notwithstanding its non-user. Notwithstanding such adverse law and order situation, assessee did not abandon its business but suffered loss for such state of affairs prevailing in that State over which he had no control with expectation of resuming business. This is not case where assessee himself is embroiled in dispute with his labourers and in process, has decided to declare lockout expressing its intention not to run business. Thus, taking into consideration circumstances of present case, we are of view that Tribunal below rightly granted depreciation in favour of assessee. Md.Nizamuddin very fairly submitted that judgment in case of Norplex Oak India has really answered issue. In that view of matter, question framed in appeal is answered in negative. appeal is thus dismissed. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) sb. Commissioner of Income-tax, Kol-IV, Kol v. East India Pharmaceuticals Works Ltd