TMI Blog2017 (5) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby the Tribunal has allowed the appeal of the assessee and dismissed the appeal of the department. 2. This Court while admitting the appeal on 26.02.2016 has framed the following substantial questions of law: (i) Whether the Tribunal was legally justified in holding that no penalty u/s 271(1)(c) could be levied when the income is computed u/s 115JB by not considering the provisions of Sections 115JB(5)? (ii) Whether the Tribunal was legally justified in cancelling the penalty levied u/s 271(1)(c) of ₹ 6,71,61,350/- out of which penalty of ₹ 1,02,20,616/- was upheld by the CIT(A)? 3. This Court in the case of The Commissioner of Income Tax vs. Gilleette India Ltd. in D.B. Income Tax Appeal No.349/2011 , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to be decided in favour of the assessee. 4.1 In that view of the matter, the issue is answered in favour of the assessee and against the department. 5. In so far as issue No.(iii) is concerned, the Tribunal relying upon the decision of Delhi High Court in the case of CIT vs. Bharat Aluminum Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed 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 notional disallowance of depreciation in respect of plant machinery of Duracell batteries which formed part of the block of assets of the assessee is not permitted in law. 53. The Delhi High court of CIT V/s. Bharat Aluminium Company Ltd. 187 Taxman 111, 124 (Del.) held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 purpose of business can be examined only in the first year when the asset is purchased. In subsequent years use of block of assets is to be examined. Existence of individual assets in the block of assets itself amounts to use for the purpose of business. 5.1 In view of the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 required to be answered in favour of the assessee and against the department. 7. Accordingly, the appeal stands dismissed. 4. In that view of the matter, penalty cannot not be imposed on the assessee since, the original appeal was decided in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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