ITAT allows depreciation on leased auto corners, remands brokerage issue for verification.

The ITAT directed the Assessing Officer to allow depreciation on auto corners leased by the assessee under the appropriate sections of the Act, setting aside lower authorities' decisions. Regarding the disallowance of brokerage and commission, the ITAT remanded the issue back to the Assessing Officer for verification and adjudication, allowing both parties to present their case. As a result, the appeals of both the assessee and the Revenue were allowed for statistical purposes.

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Issues:
1. Disallowance of depreciation on auto corner leased by the assessee.
2. Disallowance of brokerage and commission.

Analysis:

Issue 1: Disallowance of depreciation on auto corner leased by the assessee
The assessee's appeal contested the disallowance of depreciation on auto corners leased during the year. The Assessing Officer disallowed depreciation as the auto corners were not used for business purposes, relying on a decision of the Hon'ble Allahabad High Court. The CIT(A) upheld this disallowance. The assessee argued that depreciation should be allowed as the assets were part of the 'block of assets,' citing a Delhi High Court decision. The ITAT found that none of the lower authorities had considered the allowability of depreciation under section 57(ii) of the Act. It was observed that if the lease income was assessed under 'business income,' depreciation under section 32 would be allowed; if assessed under 'income from other sources,' depreciation under section 57(ii) would be applicable. The ITAT directed the Assessing Officer to allow depreciation accordingly, setting aside the lower authorities' orders.

Issue 2: Disallowance of brokerage and commission
The Revenue's appeal challenged the deletion of disallowance of brokerage and commission. The Assessing Officer disallowed the deduction as the relevant voucher indicated a date for the assessment year 2009-10, not 2008-09. The CIT(A) allowed the deduction, citing a retrospective amendment extending the TDS payment deadline. The ITAT noted that the liability for commission accrued before 31.3.2008, making it allowable in the assessment year 2008-09. However, both lower authorities had not examined when the commission became payable. The ITAT directed the issue to be sent back to the Assessing Officer for verification and adjudication, allowing both parties an opportunity to present their case. Consequently, the appeals of both the assessee and the Revenue were allowed for statistical purposes.

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