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TMI Blog2014 (1) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Appeals cannot disallow the expenditure without any basis and on the basis of surmise and suspicion which is not correct and bad in law and hence not justified. It is submitted that the assessee was doing the business and earned other income of R5 3,09,082/-, therefore, the claim of the Commissioner of Income tax Appeals that the assessee was not doing the business is not correct and not justified and bad in law. It is submitted that in the case of the assessee the assets forms the Block of Assets and once the assets entered into the block the Depreciation on the Block should be allowed. The learned counsel relied on the decision in case of Packwell Printers V Asst. Commissioner of Income Tax 1996 -(59) ITD 340 ( Jab) where it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle asset out of the entire block has been discarded or not put to use by the assessee for its business consideration, for that ground alone partial deprecation cannot be disallowed. Further, it is submitted that the case of the assessee was not a case where the assessee had sold the particular asset at a consideration which could be reduced for the purpose of computing WDV of Block of assets as provided in section 43(6) (c). It is pointed out that the assessee had discarded a particular asset during year, in question, meaning thereby that particular asset was not put to use during the year. It is submitted that the Taxation laws (Amendments Act, 1986) has changed thoroughly the system of allowing depreciation with effect from 0-04-1988 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldings meant for low paid machinery. Further, the buildings meant for low paid employees of industrial undertakings will be entitled to depreciation at 20 percent as against the general rate of 5 percent for residential buildings and 10 percent for non-residential buildings . In view of these accelerated rates of depreciation, the extra shift allowance being allowed to some items of plant and machinery enumerated in Appendix- I to the Income- Tax Rules will cease to be admissible when the new rates come into force. (n) The written down value of any assets in relation to the assessment year 1989- 90, and any subsequent assessment year shall be worked out as under in accordance with the newly inserted section 43(6) ( c ) :- &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Hyd.), held as follows: "16. The condition/requirement of section of word 'used for the purpose of business' as provided in section 32(1) of the Act for the concept of depreciation on block of assets can be summarised, that use of individual asset for the purpose of business can be examined only in the first year the asset is purchased. In subsequent years when use of block of assets is to be examined, existence of individual asset in block of assets itself amounts to use for the purpose of business. This view is fully supported by various provisions of the Act which were amended consequent to the scheme of depreciation on block of assets including to the proviso to section 32 of the act. The said proviso to section 32 requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing as a result of the transfer of the depreciable assets by the assessee during the previous year exceeds the aggregate of the amounts stated in section 50 of the act and where any block of assets ceases to exist for the reason that all the assets in that block are transferred during the previous year. 17. Furthermore, the coordinate Bench of the Tribunal in the case of Natco Exports Vs. Dy.CIT (86 ITD 445) (Hyd.) has held as follows: "From the above, it is clear that as long as an asset forms part of the block of assets and the block continues to exist, provisions of S.50 do not come into play and depreciation has to be allowed on that portion of the WDV of the assets which have been sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of business. He pointed out that in AY under consideration the assessee has not carried out any business by using the assets. Being so, the assessee is not entitled for depreciation. 9. We have heard the arguments of both the parties and perused the record. As per the provisions of section 32, to claim depreciation, the assessee shall be the owner of the assets and put into use the assets during the relevant assessment year. The contention of the revenue is that in the year under consideration the assessee has not carried out any business and the assets were not put to use. On the contrary, the learned counsel submitted that the assets have already put into use, however, the assessee has not placed any evidence before us to show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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