Disallowance of Depreciation on Let-Out Office Premises Upheld for AY 2013-14

The tribunal upheld the disallowance of depreciation on office premises let out by the assessee for the Assessment Year 2013-14. The decision was based on the requirement that assets must be used for the assessee's business to claim depreciation, which was not met in this case where the premises generated rental income under the head Income from House Property. The tribunal emphasized that allowing depreciation on let-out premises after standard deduction would lead to double deduction, which is impermissible under the law. Previous case laws cited were distinguished due to factual variances.

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Issues:
1. Disallowance of depreciation on office premises let out by the assessee.
2. Eligibility of the assessee to claim depreciation on premises let out during the assessment year.

Issue 1: Disallowance of Depreciation on Office Premises:
The appeal contested the order of the Ld. Commissioner of Income-Tax (Appeals) confirming the disallowance of depreciation amounting to Rs. 4,34,854 on office premises. The appellant argued that depreciation should have been allowed as the office premises were part of the block of assets, despite being let out during the year. The assessment for the impugned Assessment Year (AY) 2013-14 was framed by the Ld. Deputy Commissioner of Income Tax, determining the assessee's income at Rs. 119.93 Lacs after adjustments. The appellant, a resident individual engaged in the financial service sector as a Share Broker, e-filed a return with an income of Rs. 50.15 Lacs.

Issue 2: Eligibility to Claim Depreciation on Let Out Premises:
The main subject of the appeal was to determine if the assessee could claim depreciation on premises let out during the AY and earning rental income assessed as Income from House Property. The assessee claimed office maintenance charges and depreciation against these premises as business expenditure, which was disallowed by the Ld. AO. The first appellate authority upheld the disallowance, stating that once an asset forms part of the block of assets and is let out, depreciation cannot be claimed along with standard deduction u/s 24. The Ld. CIT(A) observed that allowing depreciation on let-out premises after standard deduction would amount to double deduction, which is impermissible under the law. The tribunal concurred with this view, noting that the assets should be used for the assessee's business to claim depreciation, a condition unmet for the let-out premises.

In conclusion, the tribunal dismissed the appeal, upholding the disallowance of depreciation on the office premises let out by the assessee. The decision was based on the premise that the assets should be used for the assessee's business to claim depreciation, which was not the case for the premises generating rental income assessed under the head Income from House Property. The tribunal distinguished previous case laws cited by the appellant, emphasizing the factual differences. The judgment highlighted that allowing depreciation on let-out premises after standard deduction would result in double deduction, contrary to the law.

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