Rajesh Bindal, J. - (1.) The Revenue has approached this Court by filing the present appeal, raising the following substantial questions of law, arising out of order dt. 18th Dec, 2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (for short, 'the Tribunal'), in ITA No. 1050/Chd/1996 for the asst. yr. 1994 -95: 1. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that depreciation under Sec. 32 of the IT Act, 1961, was allowable on the plant and machinery in question?
(2.) Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that for the purpose of computation of deduction under Sec. 80HHC of the IT Act, 1961, sales -tax and Central sales -tax cannot be excluded (sic -included) in the total turnover?
(3.) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing computation of interest income for the purpose of deduction under Sec. 80HHC as per Clause (baa) of the Explanation to Sec. 80HHC for computing the eligible profits and gains of business? 2. Briefly, the facts as noticed in the orders passed by the authorities below are that the assessee filed its return for the assessment year in question on 30th Nov., 1994 declaring its income at Rs. 18,76,090. The same was processed under Sec. 143(1)(a) of the IT Act, 1961 (for short, 'the Act') vide order dt. 20th June, 1995. Thereafter, regular assessment proceedings are initiated by issuing notice under Ss. 142(1) and 143(2) of the Act. Question No. 1: 3. During the course of assessment proceedings, the AO disallowed depreciation claimed by the assessee on investment made in the garment unit on the ground that the machinery so set up was not used. In appeal, the order passed by the AO, disallowing the claim of depreciation, was upheld. However, in further appeal before the Tribunal, the claim made by the assessee was accepted relying upon the judgment of this Court in CTT v/s. Pepsu Road Transport Corporation : (2002) 172 CTR (P & H) 72:, (2002) 121 Taxman 232 (P & H). While accepting the claim, the Tribunal observed that the machinery was kept ready for use and was in fact actually used by the assessee during the last two years when the assessee had received orders from foreign customers for the supply of garments. The same could not be used during the year in question on account of non -receipt of orders.;