TaxTMI 
TaxTMI 
2001 (12) TMI 69
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....section 139(8) of the Income-tax Act, 1961, is to be allowed as a deduction under section 80V and section 37(1) of the Income-tax Act, 1961?" This question is required to be answered against the assessee in the light of the decision of the Supreme Court in the case of Bharat Commerce and Industries Ltd. v. CIT [1998] 230 ITR 733, wherein it was held that interest levied under section 139 of the Income-tax Act for delay in filing the return and interest levied under section 215 of the Act for failure to pay the advance tax up to the statutory percentage, are not allowable deductions as "business expenditure" under section 37 of the Act. The question referred at the instance the assessee is, therefore, answered against the assessee and in ....
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....uthority but was allowed by the Appellate Tribunal. Section 32(1)(iii) of the Income-tax Act as it stood in that assessment year read thus: "32. (1)(iii) in the case of any building machinery, plant or furniture which is sold, discarded, demolished or destroyed in the previous year (other than the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof:" That provision is applicable to building, machinery, plant or furniture which is sold, discarded, demolished or destroyed in a previous year in which it is brought into use. That section is app....
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.... amount of depreciation. The written down value is defined under section 43(6) of the Act which reads thus, "(6) 'written down value' means-- (a) in the case of assets acquired in the previous year, the actual cost to the assessee; (b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under this Act, or under the Indian Income-tax Act, 1922 (11 of 1922), or any Act repealed by that Act, or under any executive orders issued when the Indian Income-tax Act, 1886 (2 of 1886), was in force: Provided that in determining the written down value in respect of buildings, machinery or plant for the purposes of clause (ii) of sub-section (1) of section 32, ....
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.... not possible. The cost of acquisition itself became, in this case, the written down value. Though the words used are "written down value" implying that the value writ ten is something that is brought down from a higher figure, that expression is normally apposite only where the asset had depreciated and the value written down is less than the cost of acquisition. Having regard to the manner in which the term written down value has been used in section 32(1)(iii) of the Act and having regard to the definition thereof under section 43(6), there is no reason why the cost of acquisition itself cannot be regarded as the written down value in a case like this. Learned counsel for the Revenue submitted that the law has been subsequently amende....