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TMI Blog2015 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1989-90 onwards then the aggregate of written down value of all the assets in the block at the beginning of the previous year along with additions made to the assets in the subject Assessment Year depreciation is allowable. The individual asset looses its identity for purposes of depreciation and the user test is to be satisfied at the time the purchased Machinery becomes a part of the block of assets for the first time. In the circumstances the respondent's appeal was allowed and the disallowance of depreciation was deleted. - Decided in favour of assessee. Disallowance of "loss due to fire" - Held that:- Tribunal by the impugned order correctly accepted the respondent's contention that the amount returned as loss was revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials had become obsolete warranting a reduction in its value is a finding of fact not shown to be perverse. - Decided in favour of assessee. - Income Tax Appeal No. 2088 of 2013 - - - Dated:- 17-11-2015 - M. S. Sanklecha And G. S. Kulkarni, JJ. For the Appellant : Mrs. S. V. Bharucha For the Respondent : Mr. K. Shivram, Sr. Counsel a/w. Mr. Rahul Hakani ORDER P. C. 1. This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act) challenges the order dated 20.03.2013 passed by the Income Tax Appellate Tribunal (Tribunal). The impugned order relates to the Assessment Year 2005-06. 2. The appellant has raised the following questions of law for our consideration: (a) Whether on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued its business of refining edible oil. The above depreciation was claimed on the block of assets on the written down value including the refining edible oil machinery. The Assessing Officer disallowed the claim of depreciation on the ground that one of the twin requirements of ownership and user under Section 32(1)(ii) of the Act viz. user was not satisfied. (b) On appeal the Commissioner of Income Tax (Appeals) held that in the absence of the Machinery being put to use and the business of Refining edible oil having been discontinued, the respondent is not entitled to depreciation. Thus the order of the Assessing Officer was undisturbed to the extent it disallowed depreciation of ₹ 16.96 lacs. (c) On further appeal to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as merely followed. No distinguishing feature in the present facts has been pointed out which would warrant taking a different view. Besides the Tribunal in its order in Boskalis Dredging India (supra) placed reliance upon the decision of this Court rendered in an appeal filed by the Revenue in G. R. Shipping Ltd. being Income Tax Appeal No. 598 of 2009 which was dismissed on 20.07.2008 upholding the view of the Tribunal on identical issue. Moreover it is clarified by the counsel that the refining machinery has itself been sold during the next year. (e) In the above view question Nos.(a) (b) as formulated do not give rise to any substantial questions of law. Accordingly not entertained. 4. Re:question No.(c) (a) During the subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure of ₹ 10.82 lacs as being spent for repairs. A copy of the order dated 31.03.2015 of the Assessing Officer is handed over across the Bar. The view taken by the Tribunal in principle that the amounts spent on repairs has to be allowed under Sections 31 and 32 of the Act cannot be faulted. (d) Accordingly the question as raised does not give rise to a substantial question of law. Therefore question No.(c) is not entertained. 5. Re:question No.(d) (a) During the subject assessment year the respondent assessee had debited an amount of ₹ 14.25 lacs in the profit and loss account as devaluation of closing stock. This resulted in the closing stock being devalued from ₹ 14.26 lacs to ₹ 1. This devaluation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of stocks is essentially a question of fact and before us the same is not urged as being perverse. The Revenue is contending that it is contrary to Section 145A of the Act. However nothing is shown to us in support of its contentions. Devaluation of stock due to obsolescence is a feature not unknown to business (See the decision of this Court in Alfa Laval India Ltd. Vs. Deputy Commissioner of Income tax, 266 ITR 418 as upheld by the Supreme Court in Commissioner of Income Tax Vs. Alfa Laval (India) Ltd., [2007] 295 ITR 451 (SC). (d) In the above circumstances in the present facts the findings of the Tribunal that the stock of packing materials had become obsolete warranting a reduction in its value is a finding of fact not sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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