Court No. - 37

Case :- INCOME TAX APPEAL No. - 566 of 2011

Appellant :- Commissioner Income Tax, Moradabad & Another
Respondent :- M/S. Empro Speciality
Counsel for Appellant :- A.N. Mahajan
Counsel for Respondent :- R.S. Agarwal

Hon'ble Tarun Agarwala,J.
Hon'ble Surya Prakash Kesarwani,J.
Heard Sri Ashok Kumar, learned counsel for the
appellant and Sri Rupesh Jain along with Sri R.S.
Agarwal, learned counsel for respondent.
The present appeal is for assessment year 1997-
98. department, being aggrieved by order of
the Tribunal, has filed present appeal
contending that following substantial question
of law arises for consideration, namely:-
"(1) Whether on facts and in circumstances of case, the
Tribunal is justified in law in coming to conclusion that the
assessee can exclude element of excise duty from value of
its closing stock specially when it is claiming deduction of Excise
Duty on payment basis u/s 43-B of Act?

(2) Whether on facts and in circumstances of case, the
Tribunal which is last fact finding authority is justified in law
in dismissing appeal of Revenue by mentioning plethora
of judgments without even discussing facts of those cases or
even ratio of law propounded therein?

(3) Whether on facts and in circumstances of case, the
Tribunal is justified in law in directing to allow depreciation on
the assets treating it to have been put to use for more than 180
days while these assets were used for less than 180 days as per
date of commercial production?"

In so far as question nos.1 and 2 is concerned, we
find that controversy is squarely covered by a
decision of Supreme Court in Berger Paints
(2)




India Ltd. Vs. Commissioner of Income Tax, 266
ITR 99 (SC) as well as decision of this Court in
Income Tax Appeal No.574 of 2007,
Commissioner of Income Tax and another Vs.
M/s Jubilant Organosys Ltd. decided on 26th
February, 2015.
In view of aforesaid, no substantial question of
law arises for consideration.
In so far as third issue is concerned it was
submitted that assessee was not entitled to claim
depreciation on assets since it has not been put
to use during year in question. According to the
learned counsel for department, commercial
production started on or after 13th February, 1997
and, therefore, under second proviso to Section
32 of Act since plant was not put to use for
more than 180 days, assessee was not entitled
for depreciation. submission of learned
counsel for appellant cannot be accepted.
In Commissioner of Income Tax Vs. Swarup
Vegetable Products India Ltd., 2005 (277) ITR 60,
a Division Bench of this Court held that the
assessee was entitled for depreciation even where
the plant or machinery was kept ready for use but
was not actually used during accounting year.
Similarly, in Machinery Manufactures
Corporation Ltd. Vs. CIT, 31 ITR 203, the
Bombay High Court observed that expression
"used" in Section 10(2)(vi) of Indian Income
Tax Act, 1922, which corresponds to Section 32 of
(3)




the Act has to be given to be wider meaning,
which expression includes passive as well as active
user. Bombay High Court held that even
though machinery was not in use or was kept
idle, nonetheless, assessee was entitled for
depreciation and expression "used" cannot be
strictly construed and has to be given wider
meaning. Similar view was again reiterated by the
Delhi High Court CIT Vs. Refrigeration and Allied
Industries Ltd., 2001 9247) ITR 12.
In light of aforesaid, we are of opinion
that no substantial question of law arises for
consideration. appeal is dismissed.
Order Date :- 29.9.2015
Bhaskar
(Surya Prakash Kesarwani, J.) (Tarun Agarwala, J.)
Commissioner Income Tax, Moradabad & Another v. M/S. Empro Speciality