{"id":1022,"date":"2009-10-09T06:53:02","date_gmt":"2009-10-09T06:53:02","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=1022"},"modified":"2009-10-09T06:53:02","modified_gmt":"2009-10-09T06:53:02","slug":"cit-vs-g-r-shipping-bombay-high-court","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/cit-vs-g-r-shipping-bombay-high-court\/","title":{"rendered":"CIT vs. G. R. Shipping (Bombay High Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (g_r_shipping_depreciation_non_user_block_assets.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n

Depreciation allowable even if asset not used at all for entire year<\/strong><\/p>\n

The assessee, engaged in shipping business, owned a barge which was included in the block of assets. The barge met with an accident and sank on 6.3.2000 (AY 2000-01). As efforts to retrieve the barge were uneconomical, the barge was sold on as-is-where-is in May 2001 (AY 2002-03). As the barge was non-operational and not used for business at all in AY 2001-02, the AO denied depreciation<\/strong>. The CIT (A) upheld the stand of the AO. On appeal by the assessee, the Tribunal took the view that after the insertion of the concept of \u201cblock of assets\u201d by the T. L. (A) Act, 1988 w.e.f 1.4.1988 individual assets had lost their identity and only the \u201cblock of assets\u201d had to be considered<\/strong>. It was held that the test of \u201cuser\u201d had to be applied upon the block of assets as a whole and not on individual assets<\/strong>. On appeal by the Revenue, the High Court dismissed the appeal<\/em><\/strong> holding that the issue was squarely covered in favour of the assessee by its earlier judgements in Whittle Anderson<\/strong> 79 ITR 613 and G. N. Agrawal<\/strong> 217 ITR 250. <\/p>\n

\nNote: For more judgements on depreciation, see the Consolidated Digest of Important Case Laws<\/a><\/strong>. For a round – up of the law see Depreciation Dreams Dashed<\/a><\/strong>.\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The assessee, engaged in shipping business, owned a barge which was included in the block of assets. The barge met with an accident and sank on 6.3.2000 (AY 2000-01). As efforts to retrieve the barge were uneconomical, the barge was sold on as-is-where-is in May 2001 (AY 2002-03). As the barge was non-operational and not used for business at all in AY 2001-02, the AO denied depreciation<\/strong>. The CIT (A) upheld the stand of the AO. On appeal by the assessee, the Tribunal took the view that after the insertion of the concept of \u201cblock of assets\u201d by the T. L. (A) Act, 1988 w.e.f 1.4.1988 individual assets had lost their identity and only the \u201cblock of assets\u201d had to be considered<\/strong>. It was held that the test of \u201cuser\u201d had to be applied upon the block of assets as a whole and not on individual assets<\/strong>. On the appeal by the Revenue, the High Court dismissed the appeal holding that the issue was squarely covered by its earlier judgements in Whittle Anderson<\/strong> 79 ITR 613 and G. N. Agrawal<\/strong> 217 ITR 250. <\/p>\n

Read more ›<\/a><\/div>\n

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