Capital Bus Service Pvt. Ltd. v. CIT

123 ITR 404High Court1980#1242 most cited

What is Capital Bus Service Pvt. Ltd. v. CIT authority for?

Depreciation under section 32 is allowable even if an asset is not actively used, provided it is kept in a condition of readiness or is put ready for use, as this amounts to passive user.

91

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2008 to 2026.

Also referred to as

Capital Bus Service Pvt. Ltd. v. CIT · 123 ITR 404 · section 32 · depreciation · asset ready for use · put to use · passive user · condition of readiness · allowable depreciation · written down value

Sections most often in play

Section 143(3)Section 32Section 80IASection 115JBSection 133(6)Section 144C(13)Section 154Section 40A(2)

Issues it is cited on

ready for usesection 41(2)construction pesection 2(11)section 43(6)put to usecommercial rightswritten down valuesection 32(1)employees contribution to pfenduring benefitsection 32

Judgments citing Capital Bus Service Pvt. Ltd. v. CIT

VCOMMISSION MEDIA PRIVATE LIMITED,NEW DELHI vs. ACIT, CIRCLE 26(1), NEW DELHI

In the result, the appeal of the assessee is partly allowed

ITA 4071/DEL/2024[2015-16]Status: DisposedITAT Delhi20 Mar 2026AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2015-16 V Commission Media Private Acit, Circle-26(1), Room No.195A, 1St Floor, Limited, F-342, Regus Level 4, Rectangle Vs C.R Building, One D4, Saket, New Delhi-110002 New Delhi-110017 Pan-Aaecv0198B Assessee Revenue Assessee By Shri Pulkit Saini, Adv. Revenue By Ms. Ankush Kalra, Sr. Dr Date Of Hearing 07.01.2026 Date Of Pronouncement 20.03.2026

Section 139Section 143(3)Section 40ASection 40A(2)(a)

…ld not be a ground to deny claim of depreciation and interest. In support of its contentions, the ld. Counsel placed reliance upon the decision of Hon’ble Delhi High Court in the case of Escorts Tractors Ltd. (230 taxman 584) and Capital Bus Service Pvt. Ltd. 123 ITR 404. The ld. DR argued in favour of the orders of the lower authorities. Page 7 of 9 9. We have heard rival submission in the light of material available on records. In the case of Escorts Tractor (supra), Hon’ble High Court held that ‘if plant and machinery is kept ready for use that would be enough to grant depreciation.’ Similarly, in the case of…

VERMEIREN INDIA REHAB PRIVATE LIMITED,TIRUPATI vs. DCIT., CIRCLE-1(1), TIRUPATI

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1315/HYD/2024[2021-22]Status: DisposedITAT Hyderabad19 Nov 2025AY 2021-22

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: Sri Sandeep Bagmar R, AdvocateFor Respondent: MS. U. Mini Chandran, CIT-DR
Section 143(3)Section 144C(5)Section 32

…the Learned Counsel for the Assessee relied upon the following decisions : 1. M/s. Liquidators of Pursa Limited vs. CIT [1954] 25 ITR 265 (SC) 2. Multican Builders Ltd. v. CIT [2005] 278 ITR 142 (Calcutta) (HC) 3. Capital Bus Service (P.) Ltd. v. CIT [1980] 123 ITR 404 (Del.) (HC) 4. Estate of Late Dr. S. Zakaulla Masood v. ITO [2020] 186 ITD 326 ((ITAT-Bangalore). 5. CIT v. Chennai Petroleum Corpn. Ltd [2013] 358 ITR 314 (Mad.) (HC) 6. CIT v. Girish L. Ragha [2016] 289 CTR 213 (Bombay) (HC). 8. The Learned Counsel for the Assessee with regard to TPO's rejection on comparability analysis conducted by 11 ITA.No…

AVITEL POST STUDIOZ LIMITED ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE 6(1)(2), MUMBAI

ITA 5242/MUM/2024[2012-13]Status: DisposedITAT Mumbai24 Jul 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(3)Section 148Section 37(1)

…l receipt, 15 Avital Post Studioz Limited but the costs associated with it, especially when they are ministerial and documentation-related, have been judicially held to be allowable as revenue expenditure. Reference may be drawn to CIT v. Ashima Syntex Ltd. (251 ITR 133) (Guj.) and CIT v. Shree Capital Services Ltd. (310 ITR 420) (Cal.). 36. We thus hold that the expenditure of Rs.25,35,803 was incurred wholly and exclusively for the purposes of business and is allowable under section 37(1). IV. Payment to Nishith Desai & Associates (Rs.8,07,458) – Legal Defence in Post-Investment Dispute 37. Subsequent to th…

DCIT, CC -1(4), MUMBAI vs. M/S. HINDALCO INDUSTRIES LTD., MUMBAI

Accordingly, there is no substance raised by the department and the same is dismissed

ITA 619/KOL/2007[2003-04]Status: DisposedITAT Mumbai04 Jul 2024AY 2003-04
Section 115JSection 143(3)Section 80Section 80I

…a trial run of machinery, still it makes it eligible for claim of depreciation u/s 32 of Act. In support of this, the decision of Hon'ble Gujarat High Court has been relied upon in the case of Assistant Commissioner of Income Tax v. Ashima Syntex Ltd. (2001) 251 ITR 133 (Guj), wherein trial run of machines was held to be “being used for the purpose of business” as specified under Section 32 of the Act. The relevant extract of the judgment is reproduced herein below: “37. Thus, it is clear that the settled position in law is that it is not necessary that the machinery must be used for a particular number of days…

M/S. HINDALCO INDUSTRIES LTD.(EARLIER KNOWN AS INDIAN ALUMINIUM COMPANY LTD),MUMBAI vs. DCIT, CC -1(4) (EARLIER DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-8,KOLKATTA), MUMBAI

ITA 612/KOL/2007[2003-04]Status: DisposedITAT Mumbai04 Jul 2024AY 2003-04
Section 115JSection 143(3)Section 80Section 80I

…a trial run of machinery, still it makes it eligible for claim of depreciation u/s 32 of Act. In support of this, the decision of Hon'ble Gujarat High Court has been relied upon in the case of Assistant Commissioner of Income Tax v. Ashima Syntex Ltd. (2001) 251 ITR 133 (Guj), wherein trial run of machines was held to be “being used for the purpose of business” as specified under Section 32 of the Act. The relevant extract of the judgment is reproduced herein below:…

MUKESH TRENDS LIFESTYLE LIMITED,AHMEDABAD vs. THE DY.CIT., CIRCLE-2(1)(2), AHMEDABAD

In the result, the appeal preferred by the assessee is allowed

ITA 828/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad23 Feb 2024AY 2017-18

Bench: Shri Waseem Ahmed & Ms. Madhumita Royआयकर अपील सं./I.T.A. No. 828/Ahd/2023 ("नधा"रण वष" / Assessment Year : 2017-18)

For Respondent: Shri Vipul Chavda, Sr. DR
Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 828/Ahd/2023 ("नधा"रण वष" / Assessment Year : 2017-18) Mukesh Trends Lifestyle The Dy. Commissioner of बनाम/ Limited Income Tax Vs. N.H. No. -8, Narol-Naroda Circle - 2(1)(2), Road, Narol, Ahmedabad – Ahmedabad 382405 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABCM0500F (Appellant) .. (Respondent) Shri Vihar Soni, AR अपीलाथ" ओर से /Appellant by : ""यथ" क" ओर से/Respondent by : Shri Vipul Chavda, Sr. DR Date of Hearing 20/02/2024 Date of Pronouncement…

INDIA FLYSAFE AVIATION LTD.,NEW DELHI vs. DCIT, CIRCLE-12(1), NEW DELHI

ITA 1582/DEL/2019[2013-14]Status: DisposedITAT Delhi12 Jan 2024AY 2013-14

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year: 2013-14

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Ms Meenakshi Dohare, Sr. DR
Section 143Section 143(3)

…an asset need not be an 'active user' of the asset. The courts have held in a number of cases that it is sufficient that the assessee makes the asset ready for putting it to use. The Delhi High Court in the case of Capital Bus Service (P.) Ltd. v. CIT [1980] 123 ITR 404 has held that where an assessee puts assets ready for use that amounts to passive user and in such a case depreciation must be allowed, if claimed by the assessee. The Supreme Court has held in R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 that 7 India Flysafe Aviation Ltd. vs. DCIT ITA Nos.1582/Del/2019 the term 'owner' has different meanin…

ACIT, NEW DELHI vs. M/S. THE FERTILIZER CORPORATION OF INDIA, NOIDA

In the result, the appeal of the revenue for A

ITA 3357/DEL/2016[2009-10]Status: DisposedITAT Delhi01 Jun 2023AY 2009-10

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Ms Sarita Kumari, CIT, DR
Section 143Section 143(3)

…of company's business and it was a case where the business was only inactive or dormant because of circumstances prevailing in the year in question on account of fact situation indicated above. 16. In the case of Capital Bus Services (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi), this Court remarked that the words "used for the business" are capable of larger and a narrower interpretation. If the expression "used" is to be construed strictly, it can be taken as connoting or requiring the active employment or the actual working of a machinery, plant or building in the business, etc. On the other hand, wider meanin…

ACIT, NEW DELHI vs. M/S. THE FERTILIZER CORPORATION OF INDIA, NOIDA

In the result, the appeal of the revenue for A

ITA 3356/DEL/2016[2008-09]Status: DisposedITAT Delhi01 Jun 2023AY 2008-09

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Ms Sarita Kumari, CIT, DR
Section 143Section 143(3)

…of company's business and it was a case where the business was only inactive or dormant because of circumstances prevailing in the year in question on account of fact situation indicated above. 16. In the case of Capital Bus Services (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi), this Court remarked that the words "used for the business" are capable of larger and a narrower interpretation. If the expression "used" is to be construed strictly, it can be taken as connoting or requiring the active employment or the actual working of a machinery, plant or building in the business, etc. On the other hand, wider meanin…

ACIT, NEW DELHI vs. M/S. THE FERTILIZER CORPORATION OF INDIA, NOIDA

In the result, the appeal of the revenue for A

ITA 3355/DEL/2016[2007-08]Status: DisposedITAT Delhi01 Jun 2023AY 2007-08

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Ms Sarita Kumari, CIT, DR
Section 143Section 143(3)

…of company's business and it was a case where the business was only inactive or dormant because of circumstances prevailing in the year in question on account of fact situation indicated above. 16. In the case of Capital Bus Services (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi), this Court remarked that the words "used for the business" are capable of larger and a narrower interpretation. If the expression "used" is to be construed strictly, it can be taken as connoting or requiring the active employment or the actual working of a machinery, plant or building in the business, etc. On the other hand, wider meanin…

DCIT, NEW DELHI vs. M/S. THE FERTILIZER CORPORATION OF INDIA LTD, NOIDA

In the result, the appeal of the revenue for A

ITA 5468/DEL/2015[2004-05]Status: DisposedITAT Delhi01 Jun 2023AY 2004-05

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Ms Sarita Kumari, CIT, DR
Section 143Section 143(3)

…of company's business and it was a case where the business was only inactive or dormant because of circumstances prevailing in the year in question on account of fact situation indicated above. 16. In the case of Capital Bus Services (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi), this Court remarked that the words "used for the business" are capable of larger and a narrower interpretation. If the expression "used" is to be construed strictly, it can be taken as connoting or requiring the active employment or the actual working of a machinery, plant or building in the business, etc. On the other hand, wider meanin…

DCIT, NEW DELHI vs. M/S. THE FERTILIZER CORPORATION OF INDIA LTD, NOIDA

In the result, the appeal of the revenue for A

ITA 5467/DEL/2015[2003-04]Status: DisposedITAT Delhi01 Jun 2023AY 2003-04

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Ms Sarita Kumari, CIT, DR
Section 143Section 143(3)

…of company's business and it was a case where the business was only inactive or dormant because of circumstances prevailing in the year in question on account of fact situation indicated above. 16. In the case of Capital Bus Services (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi), this Court remarked that the words "used for the business" are capable of larger and a narrower interpretation. If the expression "used" is to be construed strictly, it can be taken as connoting or requiring the active employment or the actual working of a machinery, plant or building in the business, etc. On the other hand, wider meanin…

SHRI DEVKRIPA TEXTILE MILLS (P) LTD. ,BHILWARA vs. ACIT, BHILWARA CIRCLE, BHILWARA

In the result, the appeal of the assessee is partly allowed

ITA 467/JODH/2018[2015-16]Status: DisposedITAT Jodhpur05 Apr 2023AY 2015-16

Bench: Shri B. R. Baskaran & Dr. S. Seethalakshmi

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 37(1)

…ch of Tribunal in the case of Ishwar Builders P Ltd vs. DCIT (ITA 3387/Del/2019 dated 4.12.2019, which is a direct decision on this issue. In this case, the Tribunal followed the decision rendered by Hon’ble Delhi High Court in the case of Capital Bus Service 123 ITR 404 and held as under:- “17. Ground No. 3 relates to the disallowance of depreciation on car amounting to Rs. 45.31 lakhs and interest on car loan amounting to Rs. 19.91 lakhs. Shri Devkripa Textile Mills P. Ltd. 18. A perusal of the assessment order shows that these amounts have been disallowed by the Assessing Officer solely on the ground that du…

CORRTECH INTERNATIONAL PVT. LTD.,AHMEDABAD vs. THE ADDL. CIT, TDS RANGE,, AHMEDABAD

ITA 2408/AHD/2017[2015-16]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2015-16

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

CORRTECH INTERNATIONAL PVT. LTD.,AHMEDABAD vs. THE ADDL. CIT, TDS RANGE,, AHMEDABAD

ITA 2406/AHD/2017[2014-15]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2014-15

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(2),, AHMEDABAD vs. M/S. CORRTECH INTERNATIONAL PVT. LTD.,, AHMEDABAD

ITA 1358/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

CORRTECH INTERNATIONAL PVT.LTD.,,AHMEDABAD vs. DY. COMMISSIONER OF INCOME TAX,(OSD),, AHMEDABAD

ITA 821/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2008-09

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

THE DCIT(OSD) RANGE-1,, AHMEDABAD vs. M/S. CORRTECH INTERNATIONAL PVT.LTD.,, AHMEDABAD

ITA 1129/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2008-09

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

CORRTECH INTERNATIONAL PVT.LTD.,,AHMEDABAD vs. THE ACIT.,(OSD) RANGE-1,, AHMEDABAD

ITA 2652/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

THE DCIT(OSD) RANGE-1,, AHMEDABAD vs. M/S. CORRTECH INTERNATIONAL PVT.LTD.,, AHMEDABAD

ITA 2578/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…use. It is a settled law that one an asset is ready to use then irrespective of the fact as to whether such asset has been put to use or not depreciation is allowable on the same. The Ld. A.R. relied upon the decision of Capital Bus Service Pvt. Ltd. vs. CIT, 123 ITR 404 (Del.), ACIT vs. Ashima Syntex Ltd., 251 ITR 133 (Guj.). 28. We have heard both the parties and perused all the relevant material available on record. It is not a disputed fact that the ownership of the said movable assets such as moving and ready to use machines are owned by the assessee. The assessee has made use of these assets related to con…

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Capital Bus Service Pvt. Ltd. v. CIT (123 ITR 404) — Cited in 91 Judgments | BharatTax