ITAT rules in favor of assessee on appeal, overturns disallowances & allows depreciation.

The ITAT partially allowed the appeal filed by the assessee, ruling in favor of the assessee on various issues. The CIT(A)'s decision not to admit additional evidence regarding investment in share capital was set aside. Disallowances of office renovation expenses were overturned as revenue in nature. Residential renovation expenses were allowed depreciation. The assessee's appeal was successful on these grounds, with the order pronounced on 28th February 2017.

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Issues Involved:
1. Admissibility of additional evidence for investment in share capital by Cavere Trading Private Limited.
2. Disallowance of professional fees for obtaining FIPB approval.
3. Disallowance of office renovation expenses.
4. Disallowance of residential renovation expenses.
5. Depreciation on residential renovation expenses.
6. Addition due to difference in books of account.

Issue No. 1:
The assessee appealed against the CIT(A)'s decision not to admit additional evidence regarding the investment in share capital by Cavere Trading Private Limited. The ITAT found that the CIT(A) did not consider the confirmation documents for Cavere Trading Pvt. Ltd., causing prejudice to the assessee. The ITAT set aside the CIT(A)'s decision and directed the Assessing Officer to reconsider the matter, granting the assessee an opportunity to be heard and considering the relevant documents provided. The issue was decided in favor of the assessee.

Issue No. 2 & 3:
These issues were not pressed by the assessee and were dismissed.

Issue No. 4:
The assessee challenged the disallowance of office renovation expenses treated as capital expenditure. The ITAT found that the renovation expenses were incurred for setting up branches and were revenue in nature based on relevant legal precedents. The CIT(A)'s decision was set aside, and the issue was decided in favor of the assessee.

Issue No. 5 & 6:
The assessee contested the disallowance of residential renovation expenses and claimed depreciation. The ITAT ruled in favor of the assessee, allowing depreciation on the amount spent on residential renovation, as it was a reasonable claim and in accordance with the law.

Issue No. 7:
The assessee did not pursue this issue, leading to its dismissal.

In conclusion, the ITAT partially allowed the appeal filed by the assessee, with decisions made in favor of the assessee on various issues related to the admissibility of evidence, treatment of renovation expenses, and allowance of depreciation. The order was pronounced on 28th February 2017.

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