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2013 (8) TMI 277 - AT - Income TaxComputation of Capital gains u/s 50 - deduction of notional depreciation on unused assets - Held that:- assessee was not in possession and control of the assets due to the seizure as aforesaid so as to use them for the conduct of the business. There was neither active nor passive use of the said assets as they remain seized by the Banks. The assets were auctioned by the banks to the best bidder and the assets were directly handed over by the bank to the buyer - The assessee who could not exercise any control of ownership could not be called as the owner and could not be said to have used the said asset so as to claim depreciation in respect thereof - Depreciation is inseparable from the actual user for business and depreciation allowance is permissible only on that account. It is not an allowance for natural wear and tear by reason of the aging process. Every building starts aging from the day it is constructed, but depreciation is claimable only on account of its user for business which can result in profits and gains - In section 32 the emphasis is on the user of the asset in the business of the assessee. There must be actual, effective and real user in the commercial sense and the user in the commercial sense and the user must be so linked with the business that it can be said that there is an immediate nexus between the user and the business, i.e. the real business of the assessee - Section 50 contains special provisions for computation of capital gains in the case of depreciable assets. The said section nowhere provides that certain deemed depreciation needs to be allowed - where the depreciation has been allowed as per the provisions of the Act after the fulfilling conditions prescribed u/s 32 of the Act and then the special provisions of section 50 would follow - Following decision of Commissioner Of Income-Tax, Gujarat Versus Suhrid Geigy Limited [1981 (4) TMI 79 - GUJARAT High Court] - Decided in favour of assessee. Disallowance u/s 43B - Interest liability not paid - CIT upheld disallowance - Held that:- The assessee understood the OTS of ₹ 378.72 lakhs as being first attributed towards interest and balance towards principal leaving a portion of principal unpaid and waived. On this basis, the assessee claimed interest deduction u/s 43B and offered, though, wrongly the waived principal to tax. Even if one would understand the OTS of ₹ 378.72 as being first attributed towards principal and balance towards interest, it means that unpaid interest of ₹ 1,93,96,881 is to be disallowed u/s 43B - As both erroneous offer of waived principal sum to tax and erroneous claim of interest u/s 43B emanated from a single transaction/event i.e. OTS, both should be understood to have cancelled each other. In other words, whichever way the appropriation of OTS is understood, the assessee cannot be put into double jeopardy - Disallowance u/s 43B reduced - Decided partly against assessee.
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