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2019 (4) TMI 90 - AT - Income TaxDisallowance of depreciation rejecting concept of 'Block of Asset' - existence of individual asset in block of assets - use of individual assets - Some assets of a block of assets are not used in a particular year - HELD THAT:- In the present case, this is not the case of the AO that some asset of building block and plant & machinery block are not existing in the respective block of assets. In respect of each of these two blocks, the AO is also allowing depreciation in respect of some assets included in these two blocks. Hence in our considered opinion, part amount of depreciation disallowed by the AO in respect of some asset in each of these two blocks is not justified and it is not as per law. Depreciation is allowable on both the blocks in full and the same cannot be reduced in the manner done by the AO. This is not the case of the AO that there is no business income of the assessee because part depreciation is allowed by the AO also. The objection of the AO is this that the assessee is engaged in illegal mining activity and for this reason, the mining license is cancelled. This is not the case of the AO that the assets in question cannot be used by the assessee in some other business. In fact, this is admitted by the AO also that part assets of these two blocks are being used for business purpose and AO himself allowed part depreciation for each of these two blocks. Some assets of a block of assets are not used in a particular year, whether for allowing depreciation, we have to ensure that each item of the block of assets was used for business purpose. In our humble opinion, this is not the requirement of law that in the block of assets concept, business use of each of the assets of the block has to be seen and examined and depreciation is to be allowed only in respect of the assets used. We note that in this case, one of the assets is not even owned by the assessee because it was sold out but still, depreciation is allowable on WDV less sale proceeds. Hence, it is clear that business use of each item of a block of assets is not necessary for allowing depreciation on the block. We therefore delete the disallowance of depreciation made by the AO by respectfully following the tribunal order rendered in the case of Swati Synthetics Ltd. vs. ITO [2009 (12) TMI 667 - ITAT MUMBAI]. Since, we decide the issue in favour of the assessee
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