2010 (12) TMI 947 - DELHI HIGH COURT

Depreciation - AO asked the assessee to explain on what basis the assessee was claiming depreciation on this unit, which remained closed - assessee had submitted that the unit at Bhopal remained dormant and could not function due to various reasons - for the asst. yr. 1998-99, the WDV of any block of assets shall be the aggregate of the WDV of all the assets falling within that block of assets at the beginning of the previous year - Held that:- As per amended s. 32, deduction is to be allowed in the case of any block of assets, such percentage on the WDV thereof as may be prescribed as per Circular No. 469, dt. 23rd Sept., 1986 thus it is difficult to accept the submission of the Revenue that for allowing the depreciation, user of each and every asset is essential even when a particular asset forms part of 'block of assets'. It is also essential to point out that the Revenue is not put to any loss by adopting such method and allowing depreciation on a particular asset, forming part of the 'block of assets' even when that particular asset is not used in the relevant assessment year. Whenever such an asset is sold, it would result in short-term capital gain, which would be exigible to tax and for this reason, we say that there is no loss to Revenue either - Decided in favor of the assessee