Depreciation

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Arun Punyani (Querist)

10 September 2010 Sir,
Can anybody tells me that if a Factory doesn`t run in a year then it is necessary to charges depreciation on full rate to it?
Please explain.

Thanks & Regards,
ACS Preeti

Sheetal Metha

Sheetal Metha (Expert)

10 September 2010 Depreciation means - A decrease or loss in value, as because of age, wear, or market conditions.

Hence if Assets are not used in the year it necessary to charge the depreciation @ full rate

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

10 September 2010 Since the assets were not used for the purpose of the business even for a single day depreciation under Income tax Act,1961 will not be allowed.
Citation :- CIT V Oriental Coal Co
Ltd (1994) 206 ITR 682 (Cal). This judgement is based on a question of law while the factory was under lock-out during the entire financial year.

Arun Punyani

Arun Punyani (Querist)

11 September 2010 Thanks a lot sir for ur valuable advice.

Regards,
ACS Preeti

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