COMMISSIONER OF INCOME TAX Vs. SIVANANDA STEELS LIMITED

JUDGEMENT

(1.) THE Tribunal has held that the claim that has been made by the assessee for depreciation and investment allowance on newly installed machinery was made bona fide by placing reliance on the decision in the case of V. Ramakrishna and Sons Ltd. v. CIT [1984] 149 ITR 554 (Mad), wherein it has been held that the user of the machinery in test production or experimental manufacture was still user for the purpose of the assessee's business.

(2.) THE assessee had purchased a centrifugal casting machine at the cost of Rs. 16,38,623 which was installed on March 4, 1981. THE machine was tested with aid of temporary electric connection. However, the actual production with the use of the machinery commenced only in November, 1982. THE assessee had claimed depreciation for the assessment year 1981-82, but subsequently withdrew the claim. THE Assessing Officer initiated proceedings against the assessee for having submitted inaccurate particulars in the original returns and levied penalty which was confirmed by the Commissioner. THE Tribunal having set aside the same, this reference is before us at the instance of the Revenue.