Tribunal allows appeal on depreciation & interest, deems building ready for use. Interest levy upheld.

The Tribunal allowed the appeal in favor of the assessee regarding the disallowance of depreciation and interest, recognizing the building as ready for use from 24.09.2013. The issue of deemed dividend was remanded for further consideration. The Tribunal did not overturn the levy of interest under Section 234-B.

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Issues Involved:
1. Disallowance of depreciation on the building "Business @ Mantri" at Pune.
2. Disallowance of interest claimed under Section 36(1)(iii) of the Income Tax Act.
3. Refusal to deduct a sum reported as deemed dividend.
4. Levy of interest under Section 234-B of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Disallowance of Depreciation on the Building "Business @ Mantri" at Pune:
The assessee contested the disallowance of Rs. 9,65,57,179/- claimed as depreciation on the building "Business @ Mantri" at Pune. The disallowance was based on the assertion that the building was not put to use during the year under appeal. The assessee provided the Final Completion Certificate dated 24.09.2013 from Pune Municipal Corporation, arguing that the building was ready for use, and actual use is not a precondition for claiming depreciation. The Tribunal referenced several judicial pronouncements supporting the interpretation that an asset being ready for use suffices for it to be considered "used for the purpose of business." The Tribunal concluded that the building was ready for use from 24.09.2013, thus allowing the depreciation claim.

2. Disallowance of Interest Claimed Under Section 36(1)(iii):
The assessee also challenged the disallowance of Rs. 6,05,41,088/- as interest under Section 36(1)(iii) for funds borrowed for constructing the same building. The basis for disallowance was the same as for depreciation—the building was not put to use during the year. The Tribunal noted that once the building was considered ready for use on 24.09.2013, the conditions for allowing interest under Section 36(1)(iii) were also met. Consequently, the Tribunal allowed the interest claim from the date of completion of the building.

3. Refusal to Deduct a Sum Reported as Deemed Dividend:
The assessee reported a sum of Rs. 6,73,97,716/- as deemed dividend under Section 2(22)(e) but later requested its exclusion without filing a revised return. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] rejected this request, citing the judgment in Goetze (India) Ltd. vs. CIT, which restricts the AO from entertaining claims not made through a revised return. However, the Tribunal noted that this restriction does not apply to appellate authorities. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the issue back to the CIT(A) for a decision on merit.

4. Levy of Interest Under Section 234-B:
The assessee denied liability for interest charged under Section 234-B, arguing that the levy was unjustified under the facts and circumstances. The Tribunal did not provide a detailed analysis on this issue, implicitly suggesting that it did not find sufficient grounds to overturn the levy of interest.

Conclusion:
The Tribunal allowed the appeal in favor of the assessee on the issues of depreciation and interest disallowance, recognizing the building as ready for use from 24.09.2013. The issue of deemed dividend was remanded to the CIT(A) for a decision on merit. The Tribunal did not explicitly address the issue of interest under Section 234-B, implying acceptance of the levy.

Pronouncement:
The judgment was pronounced in the open court as indicated on the caption page.

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