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In the case of Gujarat Narmada Valley Fertilisers Co. Ltd. V. Dy. CIT (108TAX213) the assessee had not made any production during the year. The AO therefore denied claim for depreciation on the ground that plant was not used during the previous year. The Commissioner (Appeals) upheld the disallowance. The Tribunal however held that if the plant and machinery are kept in ready condition but production could not be made on account of factors beyond the control of the assessee, depreciation should not be denied on that ground, as it is presumed that the plant and machinery were put to use for the assessees business.

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