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2011 (12) TMI 48 - HC - Income TaxClaim for Depericiation - “passive use” of the assets? - Assessee case pending with BIFR , filed ROI and claimed depreciation, bad debts, raw material stock written off and administrative expenses. AO disallowed as no business was carried on during the P/Y year - he observed that since the plant and machinery was not actually used for the purpose of the assessee’s no depreciation was allowable - CIT(A) allowed allowed expenses other than depericiation he took the view that there is no material on record to show that the assessee had completely abandoned its business - Tribunal allowed in assessee favour - Revenue appealed Held That:- In view of - Capital Bus Service Pvt. Ltd. Vs. CIT (1980 - TMI - 36904 - DELHI High Court) and CIT Vs. Refrigeration and Allied Industries Ltd. (2000 -TMI - 14585 - DELHI High Court) it is not necessary that the plant and machinery owned by the assessee should be actually put to use in the relevant accounting year to justify the claim of depreciation and that even if the plant and machinery or other asset is kept ready for use in the assessee’s business, the assessee would be entitled to depreciation. The only condition is that the business should not have been closed down once for all and that the assessee should demonstrate that the hopes of the business being revived are alive and real. It is however not a matter that can turn entirely on the assessee’s hopes alone. - There should be evidence or material to show that the assessee took efforts to keep the business alive in the hope of reviving the same. Thus no substansial question of law arises. - Decided against the revenue.
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