TMI Blog2014 (1) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER:- PER : Chandra Poojari This appeal preferred by the assessee is directed against the order of the CIT(A)-V, Hyderabad dated 21.04.2010 for assessment year 2003-04. 2. The grievance of the assessee in this appeal is with regard to the disallowance of loss/depreciation of Rs. 1,06,18,444/- on the block of assets. 3. The learned counsel for the assessee submitted that the Commissioner of Income 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 held that- "The Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the under consideration reads as under: 32 (1) In respect of Depreciation of Buildings, machinery, Plant or furniture owned by the assessee and used for the purposes of business or profession. The learned counsel invited our attention to the CBDT Circular No. 469 dated 23-09-1986 and the contents therein are as under: The amendments relating to depreciation allowance are as follows:- (a) A: Block of Assets" as defined in the new clause (11) inserted in section 2 of the Income Tax Act means a group of assets falling within a class of assets being buildings, machinery, plant and furniture in respect of which the same percentage of depreciation is prescribed. The necessary amendments to the Income-Tax rules prescribing the percentage of depreciation in regard to various blocks of assets will be made accordingly which will be effective from 02-04- 1987, Le. , for the assessment year 1988-89 and onwards. It is proposed that the assets which are eligible for 100 per cent depreciation in initial year itself will continue to get this benefit. In addition, there will be only two rates of depreciation presently proposed at 33 -1/3 percent and 50 percent in respect of plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided 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 requires that where an asset is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eight days in that previous year, the deduction under this sub section in respect of such asset shall be restricted to fifty percent of the amount calculated at the percentage prescribed for an asset under clause (i)or clause (ii) or clause (iia) as the case may be. When an asset purchased has satisfied the above condition in the year of purchase that asset will be included in the respective block ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hatsoever, consequent to discarding 18. Respectfully following the aforesaid decision of the Coordinate Bench of the Tribunal, we dismiss the appeals of the Revenue. 19. In the result, the appeals filed by the Revenue are dismissed. 7. According to the learned counsel, the assessee is entitled for depreciation on the block of assets as the depreciation was granted to the assessee in the same block in earlier assessment years. Being so, it cannot be questioned in the assessment year under consideration. 8. On the other hand, the learned DR submitted that for granting depreciation, the assessee shall be owner of the block of assets and should be used the assets for the 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 ..... 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