Tribunal affirms depreciation allowance for plinths used in business, rejects Revenue's appeal

The Tribunal upheld the learned CIT(A)'s decision directing the AO to allow depreciation on plinths claimed by the assessee for storing foodgrains, assessing the rental income under 'Income from business or profession'. Citing past cases involving the same assessee, the Tribunal found no new grounds to overturn the established treatment of rental income. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the allowance of depreciation on the plinths as claimed by the assessee.

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Issues:
1. Whether the learned CIT(A) erred in law by directing the AO to allow depreciation on plinths claimed by the assessee.

Analysis:
The appeal by the Revenue was against the order of the learned CIT(A) related to the assessment year 2003-04. The issue revolved around the allowance of depreciation at 10% on plinths amounting to Rs. 21,77,922, which was claimed by the assessee but disallowed by the AO. The assessee had constructed plinths and godowns as per specific requirements for storing foodgrains, which were later used by FCI. The AO initially assessed the income as house property but later allowed deductions on interest on borrowed capital. The learned CIT(A) referred to various case laws and held that the rental income from plinths and godowns should be assessed under the head of Income from business and profession, directing the AO to allow the depreciation as claimed by the appellant.

The Tribunal noted that similar issues had been addressed in previous cases related to the same assessee. In one case for the assessment years 2004-05 and 2005-06, the Tribunal had upheld the CIT(A)'s order that the income should be assessed under the head of 'Income from business or profession'. The Tribunal found no new facts to warrant a different view and dismissed the Revenue's appeal. In another case for the assessment year 2006-07, the Tribunal again upheld the CIT(A)'s order, emphasizing the consistent view taken by the Department regarding the treatment of rental income as business income. The Tribunal rejected the Revenue's appeal, stating that there were no new facts to deviate from the established position.

Considering the consistent decisions in previous cases involving the same assessee and the absence of new facts, the Tribunal in the present case upheld the order of the learned CIT(A) directing the allowance of depreciation on the plinths. Both counsels agreed that the issue was already settled in favor of the assessee. Therefore, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision to allow depreciation on the plinths as claimed by the assessee.

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