Hospital building depreciation upheld for Assessment Year 2003-04. Ownership & business use key.

The Tribunal dismissed the Revenue's appeal against the allowance of depreciation on an incomplete hospital building for Assessment Year 2003-04. The decision upheld the CIT(A)'s ruling in favor of the assessee, emphasizing ownership and business use as sufficient grounds for depreciation despite the lack of a completion certificate. The increased turnover further supported the building's integral role in business operations, leading to the rejection of the Revenue's challenge.

---

---

Issues involved: Appeal against disallowance of depreciation on incomplete hospital building for Assessment Year 2003-04.

Facts: The assessee, a Pvt. Limited Company running a Hospital, filed its return declaring a loss which was accepted by the Assessing Officer. Subsequently, a notice u/s 148 was issued regarding depreciation claimed on an incomplete hospital building. The Assessing Officer disallowed the depreciation as the building was incomplete.

Assessee's Submission: The assessee argued that the building was complete in all respects for business use, despite lacking a completion certificate due to financial constraints. They provided evidence of ownership, use for business, and increased turnover as proof of utilization.

Assessing Officer's Decision: The Assessing Officer disallowed depreciation due to lack of completion certificate, despite acknowledging ownership and business use. The CIT(A) reversed this decision, emphasizing ownership and business use as key criteria for depreciation allowance.

Revenue's Appeal: The Revenue challenged the CIT(A)'s decision, arguing that the incomplete status of the building and lack of a completion certificate should disqualify the depreciation claim.

Tribunal's Decision: The Tribunal upheld the CIT(A)'s decision, noting that ownership and business use were established, and the increased turnover indicated the building's essential role in business operations. The lack of a completion certificate did not negate the legitimate claim for depreciation.

Conclusion: The appeal filed by the Revenue against the allowance of depreciation on the incomplete hospital building was dismissed by the Tribunal, affirming the decision of the CIT(A) in favor of the assessee.

---