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Asset which is not put to use

05 January 2012

Dear Friends,

Please tell me, if an asset wich is not yet put to use, should i add such asset in the relevant block of assets and charge 0% seperately or should I treat that asset saperate from the block til the asset is used???

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4 Replies

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 05 January 2012

depreciation arises due to effluxion of time so u need to provide depreciation even though it is brand new and not used so far

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Anupam Bajaj (Student) (111 Points)
Replied 05 January 2012

i am agree with sivaram u should charge depreciation on particular asset.

CA Abhirup Kar (CA) (92 Points)
Replied 07 January 2012

Suppose an asset was acquired during the A/Y 2011-12 for d purpose of business. It ws put to use during a/y 2012-13. While computing wdv of d block during a/y 2011-12., should i include d unused asset in d block of asset or not.

SRIKAR BABU (AM) (102 Points)
Replied 07 January 2012

Hai,

According to opinion given by ICAI expert advisory committee in Whittle Anderson Ltd. v CIT (79 ITR 613), if the asset is plant & machinery and, it is installed and is fit for use, then depreciation should be provided. Otherwise provision for depreciation is not necessary.

However, according to accepted accounting principles, depreciation also arises out of efflux of time, hence, on has to keep in mind the type of asset too.