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TMI Blog2015 (12) TMI 1890X X X X Extracts X X X X X X X X Extracts X X X X ..... ional disallowance of depreciation of Rs. 3,00,385/- which has been enhanced by CIT(A) as against the disallowance of Rs. 53,395/- made by the AO. 2. Brief facts qua the issue involved are that, the assessee is in the business of cable network services and internet service provider. The AO, from the perusal of the details of additions made in plant and machinery noted that the assessee has added an amount of Rs. 23,55,968/- to the 'block of assets' which was stated to be adjustment on account of lower amount of insurance claim received. It was stated by the assessee that it had made a claim of Rs. 23.55 lakhs on account of assets destroyed / lost by theft during the earlier years and by same amount it was reduced from the WDV of the assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled by the insurance company. Thus, the assessee reinstated the WDV to that extent and claimed the depreciation. However, the Ld. CIT(A) held that the assessee has wrongly claimed the depreciation of Rs. 3,00,385/- on such assets and AO has wrongly restricted the disallowance of depreciation to Rs. 53,395/-. The reason for such a enhancement by the Ld. CIT(A) was that if the assets were destroyed or lost in the earlier years then such an asset were not put to use for the business purpose, hence, the entire claim of depreciation of such used plant and machinery has to be disallowed. Accordingly, he disallowed the entire claim of depreciation of Rs. 3,00,385/- on the WDV of Rs. 20,02,573/-. 4. Before us, the Ld. Counsel, Shri Nitesh Joshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business purpose. Such a reasoning given by the Ld. CIT(A) for the enhancement cannot be sustained, because now it is quite a settled proposition that if the "assets" have already entered into the 'block of assets' and is forming part of the gross block of assets, then deprecation has to be allowed even if the said assets has not been used in the relevant year. This proposition now stands settled by the catena of decisions including that of a jurisdictional High Court in the case of CIT vs G.R. Shipping Ltd., which is based on the decision of earlier Bombay High Court decisions. Otherwise also, if the assessee's claim for insurance has not been settled and amount has been added back, then the depreciation has to be allowed on such an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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