Section 32 of the Income-tax Act, 1961 – Depreciation – Allowance/Rate of (Use of assets) – Assessment year 2009-10 – Assessing Officer disallowed depreciation claimed by assessee on ground that factory of assessee was closed and assessee was not using assets for which depreciation was claimed – On appeal, Tribunal allowed claim of assessee on ground that assessee was in business; however, it could not run factory in year under consideration because of stay order granted by Court – Whether on facts, Tribunal had rightly allowed claim of assessee for depreciation and same was to be upheld – Held, yes [Para 2] [In favour of assessee]

Section 41(1) of the Income-tax Act, 1961 – Remission or cessation of trading liability (Cessation of liability) – Assessment year 2009-10 – Whether since assessee had not written off liability in books of account with respect to debtors and had carried forward and continued same liability, Tribunal was justified in deleting addition made by Assessing Officer under section 41(1), on account of cessation of said liability – Held, yes [Para 3] [In favour of assessee]

CASE REVIEW

Babul Products (P.) Ltd. v. Asstt. CIT [2017] 87 taxmann.com 79/167 ITD 402 (Ahd. – Trib.) (para 4) affirmed.

CASES REFERRED TO

Babul Products (P.) Ltd. v. Asstt. CIT [2017] 87 taxmann.com 79/167 ITD 402 (Ahd. – Trib.) (para 1) and Commissioner v. Mahindra & Mahindra Ltd. [2018] 93 taxmann.com 32/255 Taxman 305 (SC)