2017 (5) TMI 431

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....inst the order dated 25th April, 2014 passed by the Income Tax Appellate Tribunal ('ITAT') in ITA No. 4867/Del/2010 for the Assessment Year ('AY') 2005-2006. 4. Admit. The following question is framed for consideration: "Whether on the facts and in the circumstances of the case the ITAT was right in giving the benefit of Section 32 (1) (iii) of the Act to the Assessee? 5. The Assessee filed its return for the AY in question declaring a loss of Rs. 38,55,463/-. By the assessment order dated 26th November 2008, the Assessing Officer ('AO') made an addition of Rs. 71,12,659/- to the taxable income, thereby rejecting the claim of the Assessee that it was entitled to write off the said sum under the head 'assets written off.' 6. In t....

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....a) is not applicable to the facts of the case as the assessment order in question is A.Y. 1972-73 which is prior to the amended scheme of block of assets." 8. At the outset, it requires to be noticed that the Assessee is not a power generation company. In order to appreciate whether the claim by the Assessee regarding writing off the assets in terms of Section 32(1)(iii) is available to it, it is necessary to set-out the relevant portions of Section 32 as under: "32. (1) In respect of depreciation of (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired....

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....l because Section 32 (1) (iii) makes an express reference to "building, machinery, plant or furniture in respect of which depreciation is claimed and allowed under clause (i) and which is sold, discarded, demolished or destroyed in the previous year..." Clearly, the only sub-clause (i) under which the deprecation could be claimed and allowed is second sub-clause (i) and not the first sub-clause (i). 10. This position becomes even clearer when a reference is made to the decision of this Court in Commissioner of Income Tax v. Zoom Communication Pvt. Ltd., (2010) 327 ITR 510 (Del). The facts in that case were more or less similar. There, the Assessee was not a power generation company and was engaged in the business of audio and video equip....