1 IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S).8605 OF 2011 M/S. SAKTHI METAL DEPOT APPELLANT(S) VERSUS COMMISSIONER OF INCOME TAX RESPONDENT(S) ORDER Heard learned counsel for parties. In our view High Court justly over-turned opinion recorded by Commissioner of Income Tax (Appeals) II, Aayakar Bhavan North Block, Manachira, Calicut, vide Order dated 23.06.2004 in Appeal No.ITA57/M/00-01, inter alia, on following basis: - In other words, in our view, building which was acquired by assessee in 1974 and in respect of which depreciation was allowed to it as business asset for 21 years, that is upto assessment year 1995-96, still continued to be part of business asset and depreciable asset, no matter non-user disentitles assessee for depreciation for two years prior to date of sale. We do not know how depreciable asset forming part of block of assets within meaning Section Signature Not Verified 2(11) of Act can cease to be part of Digitally signed by NEETU KHAJURIA block of assets. description of asset by assessee in Balance Sheet Date: 2021.07.10 13:14:17 IST Reason: as investment asset in our view is meaningless and is only to avoid payment to tax on short term capital gains on sale 2 of building. So long as assessee continued business, building forming part of block of assets will retain it s character as such, no matter one of two of assets in one or two years not used for business purposes disentitles assessee for depreciation for those years. In our view instead of selling building, if assessee started using building after two years for business purposes assessee can continue to claim depreciation based on written down value available as on date of ending of previous year in which deprecation was allowed last. (emphasis supplied) reasoning by High Court in view of facts on record commends to us. High Court has, therefore, rightly restored findings and addition made in assessment order. Hence, we find no merits in this appeal and it is dismissed. ....................,J. (A.M. KHANWILKAR) ....................,J. (SANJIV KHANNA) NEW DELHI; JULY 07, 2021. 3 ITEM NO.102 Court 4 (Video Conferencing) SECTION XI-A SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Civil Appeal No(s). 8605/2011 M/S. SAKTHI METAL DEPOT Appellant(s) VERSUS COMMISSIONER OF INCOME TAX Respondent(s) Date : 07-07-2021 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.M. KHANWILKAR HON'BLE MR. JUSTICE SANJIV KHANNA For Appellant(s) Ms. Anjani Aiyagiri, Adv. Mr. R. N. Keswani, AOR For Respondent(s) Mr. N. Venkataraman,ASG Mr. D.L. Chidananda, Adv. Ms. Niranjana Singh, Adv. Mr. Navanjay Mahapatra, Adv. Mr. Varun Chug, Adv. Mr. Sughosh Subramanium, Adv. Mrs. Anil Katiyar, AOR Mr. Raj Bhadur Yadav, AOR UPON hearing counsel Court made following ORDER appeal is dismissed in terms of signed order. Pending applications, if any, shall stand disposed of. (NEETU KHAJURIA) (VIDYA NEGI) COURT MASTER COURT MASTER (Signed order is placed on file.) Sakthi Metal Depot v. Commissioner of Income-tax