Tribunal Upholds Depreciation Claim, Citing Consistent Methodology and Precedents in Favor of Assessee's Appeal.

The Tribunal allowed the appeal filed by the assessee, quashing the order of the ld. CIT(A). It emphasized the consistent acceptance of the method of write-off and the life expectancy of items, which had been recognized in earlier years. The Tribunal deemed the claim of depreciation justified, aligning with precedents and the original scrutiny proceedings.

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Issues:
1. Denial of depreciation by the Assessing Officer.
2. Justification of confirming the order by the ld. CIT(A).
3. Acceptance of the method of write-off by the Revenue in earlier years.

Analysis:
Issue 1: The appeal challenges the denial of depreciation by the Assessing Officer. The assessee, engaged in the sale of garments and accessories, improved leased premises with interior decorations. The Assessing Officer disallowed part of the expenditure under section 263 of the Income Tax Act, despite accepting the same method in previous years. The AR argued citing precedents like CIT v. Ayesha Hospital P. Ltd. and CIT v. Madras Auto Services P. Ltd., supporting the expenditure as revenue expenditure.

Issue 2: The ld. CIT(A) confirmed the Assessing Officer's order. The AR, Shri Babu Peram, emphasized the consistent method of write-off and the acceptance by the Revenue in earlier years. Referring to relevant case laws, the AR argued for the allowance of depreciation. The AR's contentions were supported by the decision of the Hon'ble Madras High Court, which held that the expenditure on interior decorations qualifies as revenue expenditure.

Issue 3: The Revenue did not dispute the original scrutiny assessment proceedings or the method of write-off. The ld. CIT(A)'s order was quashed based on the decision of the Hon'ble Madras High Court, which considered the facts and circumstances of the case. The Tribunal found justification in the claim of depreciation allowed by the Assessing Officer in the original scrutiny proceedings, leading to the allowance of the assessee's appeal.

In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing the acceptance of the method of write-off based on the life expectancy of items and the consistent practice followed in earlier years. The order of the ld. CIT(A) was quashed, and the claim of depreciation was deemed justified based on the precedents and facts presented.

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