TMI Blog2017 (5) TMI 1497X X X X Extracts X X X X X X X X Extracts X X X X ..... LHI HIGH COURT) and CIT vs. Yamaha Motors India Pvt. Ltd. [2009 (8) TMI 27 - DELHI HIGH COURT] and CIT vs. Sonal Gum Industires [2009 (2) TMI 84 - GUJARAT HIGH COURT ] as held as held that though as per section 32(1), in order to get entitled to claim depreciation, asset is to be owned by the assessee and it is also be used for the purpose of business and profession but this expression when applied to block of assets and not any specific building, machinery, plant or furniture in said block of assets as individual assets loose their identity after becoming inseparable part of block of assets. Condition for eligibility of depreciation that machinery is used for the purpose of business would mean that discarded machine is used for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law is made out. 1.3 Therefore, the application stands disposed of. 2. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal preferred by the assessee and dismissed the appeal of the department. 2.1 This Court while admitting the appeal on 29.10.2014 has framed the following substantial questions of law: (i) Whether the addition of ₹ 3,02,29,057/- made u/s 36(1) (vii) on account of provisions of bad and doubtful debts could be allowed ignoring the provisions of Section 36(2) of the Act? (ii) Whether under the facts and circumstances of the case, addition of ₹ 9,02,523/- made on account of foreign exchange fluctua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax vs. Lake Palace Hotels and Motels Pvt. Ltd. (2002) 258 ITR 526 (RAJ). 3.2 Therefore, the issue No.(i) is required to be answered in favour of the assessee and against the department. 4. Regarding issue No.(ii), in view of the decision of Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Ltd. (2009) 312 ITR 254 which was followed by this Court in the case of present assessee itself as under: 5. Counsel for respondent Mr. Jhanwar has contended that the issue No.1 2 are squarely covered by the decision of Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Ltd. (2009) 312 ITR 254 and both the issues with regard to fluctuation loss are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amalgamation and on such block depreciation for A.Y. 2000-01 2001-02 was allowed under the block concept of depreciation once an asset has formed part of the block it can t be reduced except by monies payable in respect of any assets falling in that block which is sold or discarded or demolished or destroyed as per section 43(6) of the Income tax Act. The Money becomes payable in A.Y.2004-05 when such plant Machinery were sold for ₹ 29,98,65,810/- in A.Y. 2004-05 and ₹ 1,26,23,967/- in A.Y. 2005-06 when such amount was reduced from the block of plant machinery. The example given by Ld. AR in his written note amply illustrate the mechanism of allowance of depreciation u/s 32 after the block concept of asset. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of business only means that assessee has used the machinery for the purpose of business in earlier years. Therefore once depreciation was allowed on block of assets in previous year actual user of machinery is not required with respect to the discarded machinery and the condition for eligibility of depreciation that machinery is used for the purpose of business would mean that discarded machine is used for the purpose of business in the earlier years for which depreciation is allowed. 56. Mumbai ITAT in case of M/s. Swati synthetics Lts. V/s. ITO 2010 TIOI. 78 held that depreciation is allowable on the entire block even if some of the assets of the block have not been used. The use of the individual asset for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies Act has been maintained in accordance with schedule VI. The AO thereafter has the limited power of making increases and reduction as provided for in the explanation to the ld section. Since the so-called excess depreciation provided by the assessee is not in deviation from the accounting principles and standards laid down by the Companies Act/ICAI, this cannot be added in computing the book profit u/s 115JB. This addition to the book profit is therefore directed to be deleted. 6.1 The said decision was followed by this Court in the case of Commissioner of Income Tax, Kota vs. Chambal Fertilizers Chemicals Ltd. in DB Income Tax Appeal No. 866/2008, decided on 15.05.2017. 6.2 In that view of the matter, the issue is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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