TMI Blog2015 (8) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... n the asset becomes dysfunctional. Applying the above interpretation of section 32 of the Act in the instant case we have no manner of doubt that the assessee had in fact claimed depreciation as contemplated under section 32 merely because it was termed as "terminal depreciation" was no reason to disallow the claim. The Tribunal has relied, and, in our view correctly, upon the decision of the hon'ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. reported in [2010 (1) TMI 11 - SUPREME COURT OF INDIA] which held that the concept of change of opinion should be used as a test to check any abuse of power by the Assessing Officer. In our view, the test is correctly applied in the present case and there was no occasion for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons recorded for reopening ? (3) Whether, in the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is justified in holding that the assessment made under section 147 is bad in law ? 2. In the present case, pertaining to the assessment year 2005-06, the assessee had claimed depreciation on building, plant and machinery, furniture, fixtures and vehicles amounting to ₹ 52,26,638. The claim of the assessee was described as terminal depreciation . The Assessing Officer was of the view that the expression terminal depreciation is wrong as there is no provision under the Income-tax Act, 1961 ( the Act ) to allow terminal depreciation. He, therefore, disallowed the deduction claimed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court was concerned with the interpretation of section 32 of the Income-tax Act, 1961. The hon'ble Supreme Court held as under: Depreciation is the monetary equivalent of the wear and tear suffered by a capital asset that is set aside to facilitate its replacement when the asset becomes dysfunctional. In P. K. Badiani v. CIT [1976] 105 ITR 642 (SC) this court has observed that allowance for depreciation is to replace the value of an asset to the extent it has depreciated during the period of accounting relevant to the assessment year and as the value has, to that extent, been lost, the corresponding allowance for depreciation takes place. Furthermore, Black's Law Dictionary (fifth edition) defines 'depreciation' to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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