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2012 (8) TMI 447 - AT - Income TaxDepreciation - asset concerned was not actually used for the purpose of business during the relevant previous year – Held that:- Depreciation is an allowance towards wear and tear of plant and machinery and it spreads over to a useable life for which depreciation rates have been provided under the rules. Once the asset has been purchased and is ready for use, the same is entitled to depreciation - The individual asset looses its identity and for allowing depreciation the entire block has to be considered. The ownership and the user of 'block of assets' are the criteria for claim for depreciation. The user criteria gets fulfilled at the time when the assets form part of the block of assets and once the assets are part of block of assets, they loose their individual cost or written down value. The depreciation is allowable in the entire block of asset - depreciation on dredgers is to be allowed. Disallowance of lay up cost - assessee was unable to get a contract or a business after the agreement was terminated in the year 2003 – Held that:- Expenditure which has been incurred on maintenance of plant and machinery or asset so that it is ready for use, cannot be disallowed on the ground that no business was actually done and no income has been earned. Such an expenditure has to be treated as incurred wholly and exclusively for the purpose of business
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