| Case ID |
ff72691c-168b-4946-abab-330a34ff43db |
| Body |
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| Case Number |
IT APPEAL No. 362 OF 2006 |
| Decision Date |
Oct 31, 2005 |
| Hearing Date |
|
| Decision |
The Punjab and Haryana High Court held that the assessee was entitled to claim depreciation on the machinery used for trial production of sugar, despite not having commenced full-scale commercial production. The court emphasized that under Section 32 of the Income-tax Act, depreciation is allowable if the machinery is used for business purposes, which was satisfied in this case. The appeal by the revenue was dismissed, as the tribunal's decision to allow depreciation was upheld, confirming that trial production constituted usage for the purpose of business. |
| Summary |
In the case of IT Appeal No. 362 of 2006, the Punjab and Haryana High Court addressed the issue of depreciation claims under Section 32 of the Income-tax Act, 1961. The case involved Piccadily Agro Industries Ltd., which commenced trial production of sugar in 1996 and subsequently claimed depreciation on its machinery. The Commissioner of Income Tax initially disallowed the claim, arguing that commercial production had not begun. However, the Income-tax Appellate Tribunal overturned this decision, leading to an appeal by the revenue. The High Court upheld the tribunal's ruling, stating that trial production is sufficient to qualify for depreciation claims, provided the machinery was utilized for business purposes. This decision reinforces the interpretation of Section 32, making it clear that actual production does not need to reach commercial levels for depreciation to be applicable. The case highlights the importance of understanding the nuances of tax law related to asset utilization and depreciation claims, particularly for businesses engaged in manufacturing. Keywords: Income-tax Act, depreciation, business use, trial production, Punjab and Haryana High Court. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Piccadily Agro Industries Ltd.,
Commissioner of Income Tax, Karnal
|
| Judges |
M.M. Kumar,
Ajay Kumar Mittal
|
| Lawyers |
Yogesh Putney,
Pankaj Jain,
Deepak Aggarwal,
Ms. Rimpi,
Prakul Khurana
|
| Petitioners |
Commissioner of Income Tax, Karnal
|
| Respondents |
Piccadily Agro Industries Ltd.
|
| Citations |
2009 SLD 2476,
(2009) 311 ITR 24
|
| Other Citations |
Asstt. CIT v. Ashima Syntex Ltd. [2001] 251 ITR 133,
Liquidators of Pursa Ltd. v. CIT AIR 1954 SC 253
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
32,
142(3),
263
|