Appellant wins appeal on depreciation disallowance and donation addition, ITAT directs verification of donation receipts The appellant successfully challenged the disallowance of depreciation on leased fixed assets, with the ITAT ruling in their favor due to a ...
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Appellant wins appeal on depreciation disallowance and donation addition, ITAT directs verification of donation receipts
The appellant successfully challenged the disallowance of depreciation on leased fixed assets, with the ITAT ruling in their favor due to a misinterpretation of the law. The addition on account of donation was also contested and the ITAT directed verification of donation receipts for deduction. Despite a delay in filing the appeal, it was admitted for hearing and the appellant's appeal was allowed, with directions to allow the depreciation claim and verify donation receipts for deduction under the Income-tax Act.
Issues: 1. Disallowance of depreciation on wrongful assumption of law. 2. Addition on account of donation. 3. Delay in filing the appeal.
Analysis: 1. The appellant contested the disallowance of depreciation claimed on fixed assets 'Land' leased from OMC, arguing that the lower rate claimed was not prejudicial to revenue. The AO disallowed the claim citing Sec.32(1)(ii) of the IT Act. The CIT(A) upheld the disallowance, stating the leasehold rights acquired did not entitle the appellant to claim depreciation at a lower rate. The appellant argued that the asset was intangible and depreciation should be allowed as per business exigencies. The ITAT held in favor of the appellant, stating the denial of depreciation was based on a misinterpretation of law and directed the AO to allow the depreciation claim.
2. The addition on account of donation was contested by the appellant, claiming it was done whimsically without reasons. The ITAT directed the AO to verify the donation receipts and allow the deduction as per the provisions of the Income-tax Act, 1961.
3. The appeal was filed belatedly due to the professional's indisposition handling the case. The delay was condoned, and the appeal was admitted for hearing. The ITAT allowed the appeal of the assessee, directing the AO to allow the depreciation claim and verify the donation receipts for deduction under Section 80G of the IT Act.
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