Section 2(11) of the Act , defines the block of assets . In the block of assets concept , the use of individual assets for the purpose of its business can be examined only in the first year when the asset is purchased and subsequent years’ use of a block of assets. The existence of an individual asset in the block of assets itself amounts to use for the purpose of business and therefore depreciation will be allowable on it, even though the said asset is not actually used in the course of business during the relevant assessment year.
If there are some addition in the blocks and they are not actually used, depreciation is allowable on them because they are used for the purpose of business/profession. In CIT v. Sonic Biochem Extraction Pvt. Ltd. (ITA No. 2088 of 2013. Dt. 17.11.2015) (AY.2005-06) (Bom.)(HC); www.itatonline.org the Court held that once the concept of block of assets was brought into effect from assessment year 1989-90 onwards then the aggregate of written down value of all the assets in the block at the beginning of the previous year along with additions made to the assets in the subject Assessment Year depreciation is allowable. The individual asset loses its identity for purposes of depreciation and the user test is to be satisfied at the time the purchased Machinery becomes a part of the block of assets for the first time