Asset once entered in block is eligible for depreciation

TaxPub Creative Cell

Once an asset is included in the block of assets, it remains in block for its entire life. It is not necessary that plant and machinery owned by assessee should be actually put to use in the relevant accounting year to justify the claim of depreciation and that even if the plant and machinery or other asset is kept ready for use in the assessee's business, the assessee would be entitled to depreciation. In assessee's case, due to adverse business conditions it became sick and suspended operations temporarily, however, during the year under consideration it succeeded in raising funds and started refurbishing the plant and machinery. The Fixed Assets were still lying in the control of assessee and the company was trying to revive its business and had gone for one time settlement, it showed that business was temporarily shut down due to heavy losses. Accordingly, assessee's claim of depreciation was allowable.--See Natural Biochemicals and Foods Ltd. v. Asstt. CIT 2021 TaxPub(DT) 5611 (Hyd-Trib).