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“ready for use”

DepreciationSection 32Section 3294 judgments

The decision most relied on for ready for use is Capital Bus Service Pvt. Ltd. v. CIT (123 ITR 404), cited in 91 judgments on BharatTax.

Leading authorities on ready for use

Capital Bus Service Pvt. Ltd. v. CIT
123 ITR 404 · 1980 · High Court
91
citing judgments

Depreciation under section 32 is allowable even if an asset is not actively used, provided it is kept in a condition of readiness or is put ready for use, as this amounts to passive user.

CIT v. Refrigeration & Allied Industries Ltd.
247 ITR 12 · 2001 · High Court
50
citing judgments

An asset, once installed and kept in an operational condition for business use, is eligible for depreciation even if it is not actively used during the entire previous year due to external business reasons.

Whittle Anderson Ltd. v. CIT
79 ITR 613 · 1971 · High Court
36
citing judgments

An asset kept ready for use in a business is considered to be 'used' for the purpose of business, entitling the assessee to depreciation, even if it is not actively operated or was not used in prior years. Passive usage of an asset also qualifies for depreciation.

Dineshkumar Gulabchand Agrawal v. CIT
267 ITR 768 · 2004 · High Court
30
citing judgments

The asset must be actually used for the purpose of business to be eligible for depreciation, not merely ready for use.

CIT v. Viswanath Bhaskar Sathe
5 ITR 621 · 1937 · High Court
26
citing judgments

Depreciation allowance can be claimed for an asset even if it is not actively used in the business, as the term 'used' encompasses both passive and active user. Machinery kept idle may still depreciate.

CIT v. Geo Tech Construction Corporation
244 ITR 452 · 2000 · High Court
23
citing judgments

An asset can be considered 'used' for business purposes, entitling the assessee to depreciation, even if it was only passively used or kept ready for use. The definition of 'used' for depreciation purposes is broader than actual physical employment.

CIT v. Yamaha Motor India Pvt. Ltd.
328 ITR 297 · 2009 · High Court
19
citing judgments

An asset is considered 'used for the purpose of business' under Section 32 of the Income Tax Act if it is kept ready for use, even if not actually put to use during the relevant period. This interpretation allows for depreciation claims in such scenarios.

CIT v. Larsen & Toubro Ltd.
89 Taxmann.com 186 · 2018 · High Court
17
citing judgments

Depreciation is allowable on assets that are kept "ready for use," not just those in "actual use." This interpretation applies to the term "use" in Section 32 of the Income Tax Act.

Judgments citing ready for use

Vcommission Media Private Limited, New Delhi vs. ACIT, Circle 26(1), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 4071/DEL/2024[2015-16]Status: DisposedITAT Delhi20 Mar 2026AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2015-16 V Commission Media Private Acit, Circle-26(1), Room No.195A, 1St Floor, Limited, F-342, Regus Level 4, Rectangle Vs C.R Building, One D4, Saket, New Delhi-110002 New Delhi-110017 Pan-Aaecv0198B Assessee Revenue Assessee By Shri Pulkit Saini, Adv. Revenue By Ms. Ankush Kalra, Sr. Dr Date Of Hearing 07.01.2026 Date Of Pronouncement 20.03.2026

Section 139Section 143(3)Section 40ASection 40A(2)(a)

material available on records. In the case of Escorts Tractor (supra), Hon’ble High Court held that ‘if plant and machinery is kept ready for use that would be enough to grant depreciation.’ Similarly, in the case of Capital Bus Service (supra), it was similarly held that where an asset ... kept in condition of readiness, the depreciation under section 32 would be allowable. In the instant case, depreciation on buses kept ready for use by the transport operator though not actually used for more than 30 days was held to be allowable. It is not the case of the Revenue

Windston Springs Pvt Ltd, Mumbai vs. Dy. CIT -8(3)(2), Mumbai

In the result, the appeal for assessment year 2015-16 is allowed

ITA 704/MUM/2025[2014-15]Status: DisposedITAT Mumbai08 Jan 2026AY 2014-15

Bench: Shri Saktijit Dey & Shri Jagadish

For Appellant: Respondent byFor Respondent: Shri Arun Kanti Datta, CIT D.R
Section 36(1)(iii)Section 50

construction was financed out of the sale proceeds of the old building. It was also submitted that the building was completed and ready for use and that depreciation was allowable. Reliance was placed on the decisions in CIT v. Insilco Ltd. (320 ITR 322) and CIT v. Salora International ... Assessing Officer to delete the addition made on account of short-term capital gain. 10. Having held that the building was completed and ready for use, the assessee is entitled to depreciation and the Assessing Officer is directed to allow the same. As regards the disallowance of interest, the assessee

Windston Springs Pvt Ltd, Mumbai vs. Dy. CIT -8(3)(2), Mumbai

In the result, the appeal for assessment year 2015-16 is allowed

ITA 703/MUM/2025[2015-16]Status: DisposedITAT Mumbai08 Jan 2026AY 2015-16

Bench: Shri Saktijit Dey & Shri Jagadish

For Appellant: Respondent byFor Respondent: Shri Arun Kanti Datta, CIT D.R
Section 36(1)(iii)Section 50

construction was financed out of the sale proceeds of the old building. It was also submitted that the building was completed and ready for use and that depreciation was allowable. Reliance was placed on the decisions in CIT v. Insilco Ltd. (320 ITR 322) and CIT v. Salora International ... Assessing Officer to delete the addition made on account of short-term capital gain. 10. Having held that the building was completed and ready for use, the assessee is entitled to depreciation and the Assessing Officer is directed to allow the same. As regards the disallowance of interest, the assessee

Icici Securities Limited, Mumbai vs. Principal Commissioner of Income Tax, Mumbai -4, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 3766/MUM/2025[2020-21]Status: DisposedITAT Mumbai06 Jan 2026AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

Section 143(3)Section 144BSection 263Section 36(1)(iii)Section 37(1)Section 80G

amounts reflected under CWIP broadly pertain to advances paid to vendors for software, vehicles, leasehold improvements, and laptops, which were not in a “ready-to- use” condition during the relevant financial year. It is also an undisputed fact that no depreciation was charged on CWIP either in the books ... account or claimed in the return of income. 47. It has further been explained that once the relevant assets are ready for use, the corresponding amounts are transferred from the CWIP account to the appropriate head under Property, Plant and Equipment or Intangible Assets, 27 ICICI Securities Limited and depreciation

Vermeiren India Rehab Private Limited, Tirupati vs. DCIT., Circle-1(1), Tirupati

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1315/HYD/2024[2021-22]Status: DisposedITAT Hyderabad19 Nov 2025AY 2021-22

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: Sri Sandeep Bagmar R, AdvocateFor Respondent: MS. U. Mini Chandran, CIT-DR
Section 143(3)Section 144C(5)Section 32

approval. The Counsel for the Assessee further submitted that, even if an Occupancy Certificate is assumed to be required, judicial precedents confirm that "ready to use" assets are eligible for depreciation under Section 32 of the Act. The Assessee also relies on rulings under Section 54 which support a harmonious ... submitted that, the A.O. has rightly disallowed depreciation claimed on the building on the ground that, the building was not completed and ready for use for the assessment year under consideration, on the basis of the Occupancy Certificate submitted by the assessee, where the authorities have stated that, the building

Sahara India Tourism Development Corpn. Ltd., Kolkata vs. ACIT, Circle - 8(2), Kolkata

ITA 357/KOL/2018[2014-15]Status: DisposedITAT Kolkata17 Nov 2025AY 2014-15

Bench: Shri George Mathan & Shri Sanjay Awasthiआयकर अपील सं/Ita No.357/Kol/2018 (निर्धारण वर्ा / Assessment Year : 2014-2015) Sahara India Tourism Vs Acit, Circle-8(2), Kolkata Development Corporation Ltd, Sahara India Sadan, 2A, Shakespeare Sarani, Kolkata Pan No. :Aaics 0060 P (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee By : None रधजस्व की ओर से /Revenue By : Shri Abhijit Adhikary, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 17/11/2025 घोषणा की तारीख/Date Of Pronouncement : 17/11/2025 आदेश / O R D E R Per George Mathan, Jm : This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A)-3, Kolkata, Dated 29.12.2017 For The Assessment Year 2014-2015. 2. None Represented On Behalf Of The Assessee. Shri Abhijit Adhikary, Sr. Dr Appeared On Behalf Of The Revenue. 3. It Was Submitted By The Ld. Sr. Dr That The Appeal Has Been Filed By The Assessee & As Nobody Appeared On Behalf Of The Assessee, The Order Of The Ld. Cit(A) Is Liable To Be Confirmed. It Was The Further Submission That In Para 4 Of The Assessment Order, The Ld. Assessing Officer Has Disallowed The Expenses & The Same Have Also Been Confirmed By The Ld. Cit(A). In This Case, It Must Be Mentioned That This Appeal Is Of 2018 & Appeal Had Been Heard On Multiple Occasions & Had Been Released For Various Reasons. As Of Today & For The Last Past Few Postings/Hearings, None Represented On Behalf Of The Assessee. Therefore, Keeping This Fact Pending

For Appellant: NoneFor Respondent: Shri Abhijit Adhikary, Sr. DR

ship had restaurant, swimming pool, bed rooms, etc., and only minor renovation was required which was carried out to make it ready for use. The application for general trading licence was made to the Directorate General of Shipping on January 8, 2014 (page 315 of the Paper Book). Since

Sap India Private Limited, Bangalore vs. Jurisdictional Assessing Officer - Deputy Commissioner of Income Tax Circle 6(1)(1), Bangalore

The appeal of the assessee is allowed to the extent indicated above

ITA 1519/BANG/2024[2020-21]Status: DisposedITAT Bangalore17 Nov 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Soundararajan K, Jm

Section 143Section 144BSection 144C

assessee also undertakes integration of different modules into their final product. Post-integration the assessee undertakes product testing and marketing the product ready for use in the form of a computer disk for the end-user. Assessee also performs quality control on the products reproduced and it to be distributed

Vivek Nathuram Gavhane, Pune vs. The Pr. Commissioner of Income Tax, Central, Pune

In the result, the appeal filed by the assessee is allowed

ITA 849/PUN/2025[2020-21]Status: DisposedITAT Pune04 Nov 2025AY 2020-21

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.849/Pun/2025 Assessment Year : 2020-21

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Amit Bobde
Section 133ASection 143(2)Section 143(3)Section 263Section 32Section 69C

used during the previous year. The use of the asset during the previous year may be active use or passive (le, kept ready for use). As per the above provision the depreciation is rightly allowable read with section 32 of the Income Tax Act 196. As asset is owned

Chandrakant Jethmal Jain, Mumbai vs. ITO, Ward 41(4)(1), Mumbai, Bkc, Bandra (East)

In the result, appeal filed by the Assessee is allowed in the aforesaid terms

ITA 4611/MUM/2025[2018-19]Status: DisposedITAT Mumbai30 Sept 2025AY 2018-19

Bench: Shri Narender Kumar Choudhrychandrakant Jethmal Jain, Ito, Ward-41(1), Flat No.E-2004, Anmol Excel Mumbai Estate, S.V. Road, Opp. Patel Vs. Petrol Pump, Goregaon (West), Mumbai-400062 Pan: Aacpj 0335 M (Appellant) (Respondent)

For Appellant: Shri Suresh Patni, Ld. CAFor Respondent: Shri G.J. Ninawe, Ld. Sr.D.R
Section 143(3)Section 250Section 56(2)(x)

within ten days from the date of intimation by the owner/landlord to the tenant/purchaser that the said flat is ready for use and to obtain the possession. 4.2 Thus, from the aforesaid agreement and recitals, it clearly appears that the consideration was fixed by way of said agreement

M/S. Gujarat Ambuja Exports Ltd., Ahmedabad vs. The Pr. CIT-1, Ahmedabad

In the result the order of the Ld

ITA 194/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad26 Sept 2025AY 2017-18

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), Ms. SUCHITRA KAMBLE (Judicial Member)

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Shri Alpesh Parmar, CIT.DR
Section 143(3)Section 144C(3)Section 263Section 32ASection 35ASection 40A(3)

difference between the assets having been “installed” and assets being” put to use”. It is settled law that if an asset is ready for use, it is to be considered as put to use. And any asset claimed to be installed might as well be ready for use also. Therefore

Khandelwal Soya Industries Limited, Rampur vs. ACIT(Centeral), Bareilly

In the result, appeal of the assessee is partly allowed in the

ITA 93/LKW/2022[F.Y.2005-06]Status: DisposedITAT Lucknow29 Aug 2025

Bench: Shri Kul Bharat & Shri Nikhil Choudhary

For Appellant: Shri Rakesh Garg, AdvFor Respondent: Shri S. H. Usmani, CIT(DR)
Section 127Section 132Section 153ASection 153DSection 194H

aforesaid view of the matter, the Tribunal held that the plant and machinery and other assets on which depreciation was claimed was kept ready for use and accordingly the depreciation was allowable ITA Nos. 90 to 93/LKW/2022 Page 15 of 18 under Section 32. The revenue challenges the order ... use in order to be entitled to depreciation under Section 32 and that mere passive use, in the sense that they were kept ready for use as and when the business was revived, would be sufficient compliance with Section 32 should not detain us since it has already been decided

Orient Resources, Chennai vs. Assistant Commissioner of Income Tax, Central Circle-1, Ranchi

In the result, appeal of the assessee stands allowed

ITA 66/RAN/2022[2016-17]Status: DisposedITAT Ranchi12 Jun 2025AY 2016-17

Bench: S/Shri George Mathan & Ratnesh Nandan Sahay

For Appellant: Shri K.M. Mohan Dass, FCA/Shri Tharish V, FCAFor Respondent: Smt. Rinku Singh, CIT DR

holding that there was no business activity of the assessee. It was the submission that the assessee has kept its machinery and equipment ready for use and and it was always in use till the licence was suspended. It was submitted that the expenses in relation to assessee's business ... license be restored, then obviously, the assessee should have started the business. For such purposes, he has kept the machinery are installed ready to use. This being so, as it is noticed that the assessee has not stopped his business but his business has not been suspended on account

Chinnaswamy Sunder Raju, Bangalore vs. Assistant Commissioner of Income-Tax, Central Circle-2(4), Bengaluru

In the result the appeal of the assessee is partly allowed

ITA 1071/BANG/2024[2017-18]Status: DisposedITAT Bangalore09 Jun 2025AY 2017-18

Bench: Shri. Laxmi Prasad Sahu & Shri. Keshav Dubeyassessment Year : 2017-18

For Appellant: Shri. V Chandra Sekhar, AdvocateFor Respondent: Shri. Shivanand Kalakeri, CIT(DR)(ITAT), Bangalore
Section 127Section 132Section 139(4)Section 143(2)Section 143(3)Section 153A

confirmed by an official of the state owned electricity grid, as a witness to the document. This document proves that the Plant was ready for use, thus entitling it for depreciation. (d) On the other two additions by way of Income from Capital Gains and Income by way of Deemed

Deputy Commissioner of Income Tax, Central Circle-2(4), Mumbai vs. Jyothy Labs Limited, Mumbai

In the result, both the appeals bearing ITA Nos 515 & 516/Mum/2025 filed by the revenue are dismissed

ITA 516/MUM/2025[2018-19]Status: DisposedITAT Mumbai29 Apr 2025AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Omkareshwar Chidara

For Appellant: Ms.Priyanka Jain a/wFor Respondent: Shri Asif Karmali (SR DR)
Section 143(3)Section 250Section 270ASection 274Section 80

High Court, by no stretch of imagination, it can be said that making a claim of depreciation in respect of assets, which were ready for use but could not be used for want of particulars, is a false claim. We have also noted that the assessee did not carry

Deputy Commissioner of Income Tax, Central Circle-2(4), Mumbai vs. Jyothy Labs Limited, Mumbai

In the result, both the appeals bearing ITA Nos 515 & 516/Mum/2025 filed by the revenue are dismissed

ITA 515/MUM/2025[2017-18]Status: DisposedITAT Mumbai29 Apr 2025AY 2017-18

Bench: Shri Anikesh Banerjee & Shri Omkareshwar Chidara

For Appellant: Ms.Priyanka Jain a/wFor Respondent: Shri Asif Karmali (SR DR)
Section 143(3)Section 250Section 270ASection 274Section 80

High Court, by no stretch of imagination, it can be said that making a claim of depreciation in respect of assets, which were ready for use but could not be used for want of particulars, is a false claim. We have also noted that the assessee did not carry

ACIT 6(3), Mumbai vs. Grasim Industries Ltd, Mumbai

ITA 4385/MUM/2009[2006-07]Status: HeardITAT Mumbai25 Feb 2025AY 2006-07
Section 143(2)Section 143(3)Section 24Section 43B

Section 32 of the Act deduction is allowed for deprecation in respect of assets which are used for the business/profession and/or are ready for use in the business/profession. Therefore, we find some merit in the contention raised by the Revenue depreciation cannot be allowed for an asset that has been

Grasim Industries Ltd ( Corporate Finance Division), Mumbai vs. Addl CIT RG 6(3), Mumbai

ITA 3762/MUM/2009[2006-07]Status: DisposedITAT Mumbai25 Feb 2025AY 2006-07

Bench: the CIT(A). The CIT(A) partly allowed the appeal preferred by the Assessee vide order, dated 18/05/2009. 4. Not being satisfied with the relief granted by the Id. CIT(A), the Assessee has preferred appeal before this Tribunal. The Revenue has also filed cross-appeal challenging the relief granted by the Id. CIT(A).

For Appellant: Shri J. D. Mistry Sr. AdvocateFor Respondent: Shri Kishor Dhule
Section 143(2)Section 143(3)Section 24Section 43B

Section 32 of the Act deduction is allowed for deprecation in respect of assets which are used for the business/profession and/or are ready for use in the business/profession. Therefore, we find some merit in the contention raised by the Revenue depreciation cannot be allowed for an asset that has been

The Assistant Commissioner of Income Tax, Circle-3(1), Vijayawada vs. Mithra Kyokuto Special Purpose Vehicles Company Private Limited, Vijayawada

In the result, appeal of the revenue is allowed

ITA 473/VIZ/2019[2012-13]Status: DisposedITAT Visakhapatnam02 Jan 2025AY 2012-13

Bench: Shri K. Narasimha Chary, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./I.T.A.No.473/Viz/2019 (निर्धारण वर्ा/ Assessment Year: 2012-13) M/S. Mithra Kyokuto Special Purpose Asst. Commissioner Of Income Tax V. Vehicles Company Pvt Ltd., Circle – 3(1) P.B. No. 443, Gudavalli Vari Street Central Revenues Building Governorpet, Vijayawada - 520002 M.G. Road, Vijayawada – 520002 [Pan: Aagcm8134Q] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 143(1)Section 143(2)

account of depreciation of Rs.2,66,81,164/- as the assessee has neither used the plant & machinery nor was it ready for use. 3. The Id. CIT(A) erred in not considering the facts that the assessee has wrongfully claimed the depreciation by stating that the assessee company has made ... order stated that Ld. CIT(A) has accepted that the production activity has not commenced but the assets were kept ready for use. However, Ld. CIT(A) has considered the passive use of assets which is falling within the scope of the expression “used for the purpose of business” under

Mahanagar Gas Limited, Mumbai vs. Deputy Commissioner of Income Tax, Income Tax

ITA 505/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Dec 2024AY 2021-22

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaran

For Appellant: Shri P.P. JayramanFor Respondent: Shri R.R. Makwana, Sr.DR
Section 143(1)Section 143(3)

incurred in laying down new pipelines are initially booked under “work in progress”. When the laying of pipelines is completed and they are ready for use, the costs booked under the head “work in progress” is transferred to Fixed assets account and depreciation shall be claimed thereon thereafter

Mahanagar Gas Limited, Mumbai vs. Assistant Director of Income Tax, CPC

ITA 1694/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Dec 2024AY 2021-22

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaran

For Appellant: Shri P.P. JayramanFor Respondent: Shri R.R. Makwana, Sr.DR
Section 143(1)Section 143(3)

incurred in laying down new pipelines are initially booked under “work in progress”. When the laying of pipelines is completed and they are ready for use, the costs booked under the head “work in progress” is transferred to Fixed assets account and depreciation shall be claimed thereon thereafter