The Tax Publishers2021 TaxPub(DT) 0520 (Del-Trib)


Section 32

Where assessee purchased certain machineries which were ready to use installed and commissioned, one day before the year ending, the mere fact that the installation certificate was dated 30-3-2013, i.e., one day prior to the last day of the financial year, cannot disentitle assessee's right to claim depreciation on assets.

Depreciation - Additions to machinery made but installation certificate being 30th March of the financial year - Assets being ready for use, whether entitled for depreciation - Allowability

Assessee purchased certain machinery which were installed and commissioned on which depreciation was claimed. It was the case of the revenue that the installation certificate was dated 30-3-2013 accordingly the assessee was held ineligible to claim depreciation. On appeal, Commissioner (Appeals) upheld the views of the AO. Aggrieved, assessee went in higher appeal to ITAT. Held: If the asset was ready and installed on 30-3-2013 the mere fact that the installation certificate was dated 30-3-2013, i.e., one day prior to the last day of the financial year cannot disentitle assessee's right to depreciation. Depreciation is allowable on assets which are kept ready for use as well. If the assets in the form of machinery equipment are kept ready for use, then same is eligible for depreciation as per the Income Tax Rules it is not necessary that the plant and machinery owned by the assessee should be actually put to use in the relevant accounting year to justify the claim of depreciation and that even if the plant and machinery or other asset is kept ready for use in the assessee's business, the assessee would be entitled to depreciation.

Applied:Stitchwell Qualitex (RF) v. ITO & Anr. 2015 (9) TMI 850 : 2015 TaxPub(DT) 3663 (Del-HC); National Thermal Power Corporation v. CIT (2013) 357 ITR 253 (Del) : 2013 TaxPub(DT) 0281 (Del-HC); Whittle Anderson Ltd. v. CIT (1971) 79 ITR 613 (Bom) : 1971 TaxPub(DT) 0006 (Bom-HC); CIT v. Yamaha Motor India Pvt. Ltd. (2010) 328 ITR 297 (Del) : 2010 TaxPub(DT) 0715 (Del-HC); CIT v. Vayithri Plantations Ltd. (1981) 128 ITR 675 (Mad) : 1981 TaxPub(DT) 0486 (Mad-HC); CIT v. Refrigeration and Allied Industries Ltd. (2001) 247 ITR 12 (Del) : 2001 TaxPub(DT) 0593 (Del-HC) and CIT v. Integrated Technologies Ltd. in ITA No. 530/2011 (Del-HC), dt. 16-12-2011: 2012 TaxPub(DT) 1642 (Del-HC)


FAVOUR : In assessee's favour

A.Y. : 2013-14



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