Cit vs Gates (India) (P) Ltd.
2007 Latest Caselaw 1382 Del

ORDER

1. The revenue is aggrieved by an order dated 29-9-2006 passed by the Tribunal, Delhi Bench 'B' in ITA No. 3625/DeI/2003 relevant for the assessment year 1998-99.

2. The only issue that arises in this case is whether the assessee had used its assets for the purposes of its business as required by Section 32 of the Income Tax Act, 1961 for the purposes of claiming depreciation.

3. The assessing officer was of the view that even though the assessee had carried out a trial run on 16-2-1998 and had started its manufacturing process on 28-3-1998, it had not used its assets for the purposes of its business.

4. On appeal, the Commissioner (Appeals) disagreed with the view taken by the assessing officer and noted the various facts and documentary evidence furnished by the appellant including the production records. Reliance was placed upon the certificate of the engineer along with the detailed production process to indicate that even though the production process has commenced on 28-3-1998, the output could only be obtained on 3-4-1998 in view of the process involved.

5. The revenue preferred an appeal before the Tribunal which took into account two significant factors. Firstly, that the assessing officer had not made any direct enquiry nor deputed any inspector to make an enquiry about the process of production nor did he obtain any expert report about the trial production and commercial production. On the other hand, the second aspect of the matter was that the assessee had filed details about the manufacturing process from the supply of raw material to the stage of finished goods. The assessee had also filed copies of the ledger to show the quantity of the raw material supply, removal of goods from the factory was shown in the RG 1 register maintained for the purposes of excise duty, and the details of the trial run carried out on 16-2-1998 when technical production commenced were also made available. Similarly, the hose test taken on 23-2-1998 showed that the assessee had used the assets for the purposes of its business well before the end of the financial year in question.

6. We find no error in the view that has been taken by the Commissioner (Appeals) as well as the Tribunal. Both the authorities have arrived at concurrent findings of fact, which ought not to be easily disturbed in second appeal.

In our opinion, no substantial question of law arises for consideration. The appeal is dismissed with costs of Rs. 5,000 to be deposited by the appellant with the Delhi High Court Legal Services Committee by cheque within four weeks from today.

List for compliance on 19-9-2007.