2017 (5) TMI 1497

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ial question of law is made out. 1.3 Therefore, the application stands disposed of. 2. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal preferred by the assessee and dismissed the appeal of the department. 2.1 This Court while admitting the appeal on 29.10.2014 has framed the following substantial questions of law: "(i) Whether the addition of Rs. 3,02,29,057/- made u/s 36(1) (vii) on account of provisions of bad and doubtful debts could be allowed ignoring the provisions of Section 36(2) of the Act? (ii) Whether under the facts and circumstances of the case, addition of Rs. 9,02,523/- made on account of foreign exchange fluctuation could be ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... (2002) 258 ITR 526 (RAJ)." 3.2 Therefore, the issue No.(i) is required to be answered in favour of the assessee and against the department. 4. Regarding issue No.(ii), in view of the decision of Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Ltd. (2009) 312 ITR 254 which was followed by this Court in the case of present assessee itself as under: "5. Counsel for respondent Mr. Jhanwar has contended that the issue No.1 & 2 are squarely covered by the decision of Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Ltd. (2009) 312 ITR 254 and both the issues with regard to fluctuation loss are to be decided in favour of the assessee." 4.1 In that view of the mat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nder the block concept of depreciation once an asset has formed part of the block it can't be reduced except by monies payable in respect of any assets falling in that block which is sold or discarded or demolished or destroyed as per section 43(6) of the Income tax Act. The Money becomes payable in A.Y.2004-05 when such plant & Machinery were sold for Rs. 29,98,65,810/- in A.Y. 2004-05 and Rs. 1,26,23,967/- in A.Y. 2005-06 when such amount was reduced from the block of plant & machinery. The example given by Ld. AR in his written note amply illustrate the mechanism of allowance of depreciation u/s 32 after the block concept of asset. Therefore, the notional disallowance of depreciation in respect of plant & machinery of Duracell batteries ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s in earlier years. Therefore once depreciation was allowed on block of assets in previous year actual user of machinery is not required with respect to the discarded machinery and the condition for eligibility of depreciation that machinery is used for the purpose of business would mean that discarded machine is used for the purpose of business in the earlier years for which depreciation is allowed. 56. Mumbai ITAT in case of M/s. Swati synthetics Lts. V/s. ITO 2010 TIOI. 78 held that depreciation is allowable on the entire block even if some of the assets of the block have not been used. The use of the individual asset for the purpose of business can be examined only in the first year when the asset is purchased. In subsequent years use....