Law:

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Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment year 2000-01 - Whether to claim write off of discarded/obsolete plant and machinery under section 32(1)(iii), said plant/machinery must have been used for purposes of business during previous year in which machinery is sold, discarded, demolished or destroyed - Held, yes FACTS Assessee-company, engaged in manufacturing and trading of floppy and other computer consumables, claimed deduction under section 32(1)(iii) for write off of the discarded/obsolete plant and machinery for the assessment year 2000-01. The Assessing Officer held that as per the provision of section 32(1)(iii), the machinery should have been used at least for a part of the accounting year to claim depreciation in the year in which the same was sold or otherwise discarded and as plant/machinery in question was not used during the period under consideration, the assessee was not entitled to such write off. On appeal, the Commissioner (Appeals) and the Tribunal upheld the finding of the Assessing Officer. On appeal : HELD A bare reading of the provision of section 32(1)(iii) will show that one of the conditions for allowing the deduction under said section is that the machinery must have been used for the purposes of the business during the previous year in which the machinery is sold, discarded, demolished or destroyed. There was no dispute between the parties on that issue. The only dispute was as to whether the machinery was so used or not. [Para 8] There was a concurrent finding of the three authorities, i.e., the Assessing Officer, the Commissioner (Appeals) and the Tribunal to the effect that the machinery was not put to use at all during the relevant previous year. There was nothing on record to show that the machinery in question was put to use during the relevant previous year. [Paras 9 and 10] Therefore, finding of three authorities was justified and the appeal was liable to be dismissed. CASES REFERRED TO Maharashtra Minerals Corpn. Ltd. v. CIT [1995] 216 ITR 578 (Bom.) [Para 6] and CIT v.Co-operative Wholesale Society Ltd. [1992] 195 ITR 361/ 62 Taxman 292 (Ker.) [Para 6]. Ms. Shashi M. Kapila and…

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