Assessee can claim depreciation on the assets if he could not run the factory on account of stay from the Court and If the assessee had not written of its liability in books of account, said liability could not be ceased under section 41(1) - Vide Decision of High Court of Gujarat in Babul Products (P.) Ltd.vs. Assistant Commissioner of Income-tax, OSD, Range-1, Ahmedabad

The Honorable High Court of Gujarat in the above case has held that if the assessee has closed the business due to a stay order received from the court, he shall be entitled to claim depreciation under section 32. Further, if the assessee has not written off a liability in the books of accounts, it cannot be brought to tax under section 41(1).