COMMISSIONER OF INCOME TAX Vs. J K TRANSPORT

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer by this court :

(2.) THE assessee is a registered firm which continued to derive income from contract work with Bhilai Steel Plant. THE return filed on October 31, 1990, declaring an income of Rs. 3,59,800 was revised on March 27, 1991, declaring the same income of Rs. 3,59,800. THE reason for filing the revised return was claimed to include the filing of TDS certificates which were left to be included in the original return. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed depreciation in respect of new trucks bearing Nos. NP 24A-2154 and MR 24A 2144. An examination of the accounts and other documents revealed that the assessee purchased propolated and structurals from Sun Flat Iron and Steel Co., Raipur, vide their Bill No. 1263 dated March 31, 1990, which were used for body building of the trucks in question. THE Assessing Officer further noticed that the assessee got some welding work done from Deep Welding Works, Raipur, vide their Bill No. 126 dated March 30, 1990. THE Assessing Officer came to the conclusion that the assessee would not have got the trucks in complete form after body building and the same could not be put to use. It was also observed that the assessee failed to produce any evidence for the purchase of diesel for the trucks to show that the vehicles were actually used. THE Assessing Officer concluded that the trucks were not in use and were not ready for use before March 31, 1990, and that the construction of body building of the trucks was not completed. THE Assessing Officer after making assessment under Section 143(3) of the Act on March 30, 1992, disallowed the assessee's claim to depreciation in respect of the above two trucks. Aggrieved by this finding of disallowance of depreciation, the assessee preferred an appeal and the appellate authority confirmed the order of the Assessing Officer and dismissed the appeal. THE assessee then approached the Tribunal and the Tribunal by order dated May 3, 1995, accepted the assessee's claim for depreciation and allowed the appeal. Hence, the Revenue approached the Tribunal for referring the aforesaid question of law for answer by this court and, accordingly, the Tribunal has referred the same to this court.

(3.) IN the case of CIT v. Vayithri Plantations Ltd. [1981] 128 ITR 675 (Mad) their Lordships had occasion to consider the Supreme Court case of Liquidators of Pursa Ltd. [1954] 25 ITR 265 and after noticing that case, their Lordships observed that the word "used" has been read in some of the pool cases in a wide sense so as to include a passive as well as active user. It was observed by their Lordships that the Supreme Court did not express any opinion on the correctness or otherwise of the decision in what are called the "pool cases". It was observed that it would be necessary, however, to bear in mind that the statutory expression cannot vary in its meaning and content with the cases belonging to the pooling category and with others. The expression would have to be construed in a uniform sense so as to be applicable to all cases. Their Lordships considered the decision given by this court in the case of CIT v. Jiwaji Rao Sugar Co. Ltd. [1969] 71 ITR 319. This court in the case of CIT v. Jiwaji Rao Sugar Co. Ltd. [1969] 71 ITR 319 considered the Supreme Court case and observed as under (page 321) :