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<h1>High Court Directs Tribunal on Deductibility of Scrap Value for Asset Depreciation</h1> The High Court directed the Tribunal to refer the question regarding the deductibility of scrap value from the actual cost of assets for depreciation for ... Taxability of sale proceeds of scrap - deductibility of scrap value from actual cost for computing written down value for depreciation under sections 43(1) and 43(6)(c) of the Income-tax Act, 1961 - question of law to be referred by the Tribunal - non-emergence of a question from the Tribunal's orderTaxability of sale proceeds of scrap - non-emergence of a question from the Tribunal's order - Question No. 1 (whether the Tribunal was legally correct in quashing the CIT(A)'s holding that sale proceeds of scrap value are not taxable) does not arise from the Tribunal's order. - HELD THAT: - The Court examined the application for a reference and the Tribunal's order and concluded that the alleged question of law concerning taxability of scrap sale proceeds is not raised by or does not emerge from the Tribunal's decision. Having found that the point sought to be referred is not reflected in the Tribunal's order, the Court determined that there is no scope to frame or refer Question No. 1 to the High Court under the mechanism invoked.Question No. 1 does not arise from the Tribunal's order and is not referred.Deductibility of scrap value from actual cost for computing written down value for depreciation under sections 43(1) and 43(6)(c) of the Income-tax Act, 1961 - question of law to be referred by the Tribunal - Question No. 2 (whether scrap sale proceeds are not deductible from actual cost of the block of assets for computing written down value for depreciation) was not conclusively decided by the Tribunal and is to be referred. - HELD THAT: - The Court observed that although the Tribunal noted the arguments on whether the scrap value may be deducted from the actual cost of the block to arrive at written down value for depreciation, it did not pronounce a conclusive decision on that legal question. Given the absence of a definitive adjudication by the Tribunal on the statutory issue framed in Question No. 2, the Court directed that the Tribunal refer this question of law for consideration.Question No. 2 is to be referred by the Tribunal for determination.Final Conclusion: The application is disposed of: Question No. 1 is held not to arise from the Tribunal's order and is not referred; Question No. 2 is directed to be referred by the Tribunal for determination. The High Court of Allahabad considered a case involving the taxability of scrap sale proceeds. The Department sought to refer two questions of law, one regarding the taxability of scrap sale proceeds and the other about deductibility of scrap value from the actual cost of assets for depreciation. The Tribunal upheld the Commissioner's decision regarding the taxability issue but did not conclusively decide on the deductibility matter. The High Court directed the Tribunal to refer the second question for consideration.
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