Is depreciation allowable on discarded plant and machinery?

Case : Would the phrase ‘used for the purpose of business’ in respect of discarded machinery be eligible for depreciation under Sec 32?

Ruling : 

The judicial pronouncement laid forward in this regard was that the term ‘used for the purpose of business’ is a necessary condition toclaim depreciation.However, it is nowhere intended or instructed that such usage of machinery would happen in the relevant previous year.It is sufficient even if the discarded plant and machinery was used earlier in earlier previous years.To clarify further, a machinery which has lost its value and usage capacity in the previous year 2011-12 can be allowed to be depreciated in the normal course if it has been put to use in 2010-11 or any years before that.

[CIT vs Yamaha Motor India Pvt.Ltd.]

Year of Pronouncement : 2010

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