Assessee granted 100% depreciation on scaffolding materials for passive use before year-end

The Tribunal allowed the assessee's appeal for the assessment year 1993-94 regarding the eligibility of 100% depreciation on scaffolding materials as passive use commenced before the year-end. However, for the assessment year 1994-95, the appeal was only partially allowed, with materials received after the previous year deemed ineligible except for those received at 4:00 P.M. on the last day, considered ready for use.

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Issues:
1. Dispute over eligibility of 100% depreciation on scaffolding material for assessment years 1993-94 and 1994-95.

Analysis:
1. For the assessment year 1993-94, the assessee, engaged in civil engineering and construction work, claimed 100% depreciation on scaffolding materials. The AO disallowed the claim for materials not dispatched to the site office, totaling Rs. 4,19,440. The CIT(A) confirmed the disallowance, leading to an appeal before the Tribunal.
2. In the same year, the assessee claimed depreciation on scaffolding materials worth Rs. 22,72,378 purchased for the next assessment year. The AO disallowed Rs. 5,94,818 for materials not used for business and Rs. 3,64,284 for materials received after the end of the previous year. The CIT(A) upheld the disallowance, prompting an appeal.
3. The assessee sought to raise an additional ground that scaffolding material expenditure should be treated as revenue expenditure if depreciation is not admissible, which the Tribunal allowed for consideration.
4. The counsel cited precedents to argue that passive use of assets suffices for depreciation claims. The Departmental Representative contended that actual use is necessary, relying on relevant judgments.
5. The Tribunal held that for 1993-94, as scaffolding materials were dispatched to the site office before the year-end, passive use commenced, allowing the depreciation claim. However, for 1994-95, materials received after the previous year were not eligible, except for those received at 4:00 P.M. on the last day, deemed ready for use. Consequently, the appeal for 1993-94 was allowed, and for 1994-95, partially allowed.

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