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TMI Blog2016 (1) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... that no business has been carried on by the appellant. The CIT (A) ought to have allowed the depreciation claimed because the appellant had carried out the allied business activity of sale of insurance related books. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in upholding the action of the Assessing Officer, in treating the income from sale of insurance related books as "Income from Other Sources" instead of assessing the same as income from "Business": The sale of insurance related books being allied to the main activity of technical consultancy and insurance training, is a part of the regular business of the appellant. 3. The CIT (A) has erred in not allowing expenditure incurred by the appellant under the heads "Insurance Expenses" - Rs. 5003/-, "Miscellaneous Expenses" Rs. 16,840/- and "Travelling & Conveyance" - Rs. 5,355/ - without specifying any reason for not allowing the same." B. I.T.A.No. 5930/Del/2013: "On the facts and circumstances of the case and in law, the learned CIT (Appeals) has erred in upholding the disallowance of depreciation of Rs. 8,88,239/ - made by the Assessing Officer on the ground that no business has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 44,61,784/- in I.T.A.No.713/Del/2012 and Rs. 8,88,239/- in I.T.A. No.5930//Del/2013 without having any material on record to prove the fact that the assessee company had closed its business prior to the Assessment Year 2008-09 and in fact, the assessee company has made sales during these Assessment Years but due to lack of business order, trading business could not be carried out. 8. On the other hand, Ld. D.R. relied upon the order passed by Ld. CIT(A) and contended that since no trading business has been shown by the assessee, A.O. has rightly treated the income shown by the assessee as 'income from other sources' . 9. Ld. CIT(A) has upheld the assessment order in disallowing the depreciation on the ground that the assessee is claiming set off depreciation on fixed assets against different activities in the past and activities of trading has been accepted as business income but in Assessment Year 2008-09 the activity itself is doubtful as appellant could not produce any vouchers of the alleged sale and purchase. The appellant has provided only computerized ledger account and original sales / purchase voucher have not been produced even during the appellate proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, as business expenditure were allowed this fact goes to prove that the business activities were being carried out by the assessee company. 12. Now, the next question arises for determination is, "as to whether the assessee company is entitled for depreciation on computer and software in the face of the fact that it has admittedly not carried out any technical consultancy and provided technical training during the year under assessment." 13. Identical issue has come up for determination before the Hon'ble Jurisdictional High Court in case entitled CIT Vs Yamaha Motor India (P) Ltd, 328 ITR 297. For ready reference, the operative part at para 6, 7 & 8 of the judgement in Yamaha Motor India (P) Ltd. (supra) is reproduced as under: "6. The relevant and related provisions, in this regard, for decision of the issue are Section 32(1) which requires that the assets are used for the purposes of the business, Section 32(1 )(iii) lays down the details and requirements with respect to claim of depreciation inter alia of discarded machinery, Section 43(6)(c)(B) defines written down value with respect to block of assets, Section 50(2) under the head of profits chargeable to tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z. the age of the machinery, or that it has become obsolete as new technology has come in and so on. We thus hold that the discarded machinery may not be actually used in the relevant previous year as long as it is used for the purposes of business in the earlier years." 14. Following the law laid down by the Hon'ble Jurisdictional High Court in the case cited above, we are of the considered view that the assessee company is entitled for depreciation on computer and software during the year under assessment (Assessment Year 2008-09 and 2010- 11) though not actually used for the purpose of business on the grounds inter alia that when during the previous Assessment Year i.e. Assessment Year 2007-08, the assessee disclosed receipt from technical consultancy and training fee at Rs. 4,35,90,000/- , income from trading activities at Rs. 9,75,607/- and other income at Rs. 3,50,381/- but shown the income from technical consultancy and training fee at 'nil' in Assessment Years 2008-09 and 2010-11, it is entitled for depreciation u/s 32 of the Act as the same has not been discarded by the assessee company; that when the machinery in question was in fact used in the earlier year and dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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