Full Judgment Text
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CASE NO.:
Appeal (civil) 2976 of 2008
PETITIONER:
Dy. Commr. of Income Tax, Ahmedabad
RESPONDENT:
N.K. Industries Ltd
DATE OF JUDGMENT: 22/04/2008
BENCH:
S.H. KAPADIA & B. SUDERSHAN REDDY
JUDGMENT:
JUDGMENT
O R D E R
CIVIL APPEAL NO.2976 OF 2008
(Arising out of S.L.P.(C) No.6024/2007)
Leave granted.
This Civil Appeal is filed by the Department against the judgment and Order
dated 17th October, 2005 passed by the Gujarat High Court in Tax Appeals
Nos.240/2003 and 261/2003.
We are concerned with the block period 1-4-1988 to
24-2-1999. The main contention advanced on behalf of the Department is that for
allowance of deduction for depreciation, the asset must not only be owned by the
assessee but it must also be used for the purposes of business or profession of the
assessee. It is the case of the Department that the word "used" in Section 32 of the
Income Tax Act, 1961 refers to actual use of the asset. It is the case of the Department
that having regard to the scheme of the Income Tax Act, 1961 and, particularly, after
the introduction of the concept of "block of assets", actual use is the only requirement
apart from ownership for allowance of depreciation under Section 32. It is the case of
the Department that important question of law arose for determination before the
High Court. That, the High Court has failed to examine the said question and that it
had erred in dismissing the Tax Appeals only on the ground that no substantial
question of law had arisen.
In the present case, the Tribunal has examined the statements of certain witnesses
and after analysing the material on record, it has come to the conclusion on facts that
there is nothing to show that the machinery, namely, expellers remained idle for the
entire block period 1-4-1988 to 24-2-1999. Having examined the record ourselves, we
agree with the view expressed by the Tribunal on the facts of the present case. Hence,
it is not necessary for us to go into the larger question of law regarding the
connotation of the word "used" appearing in Section 32 of the Income Tax Act, 1961.
For the afore-stated reasons, Civil Appeal filed by the Department stands
dismissed. Question of law is kept open.
No order as to costs.