TaxTMI 
TaxTMI 
2015 (6) TMI 1019
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..... The learned Commissioner (Appeals) failed to appreciate that tenancy rights were a form of licence. As regards addition of Payment to Retired Partner 4. The learned Commissioner (Appeals) erred in confirming addition of payment made to a retired partner of Rs. 25,85,617 in terms of the partnership deed. 5. The learned Commissioner (Appeals) failed to appreciate that such payment was diverted by overriding title. 6. The learned Commissioner (Appeals) was wrong in holding that that such payment, being a self imposed obligation, was a gratuitous one. Relief Sought 7. Your appellants pray that the order of the learned Commissioner (Appeals) be modified by: a. allowing depreciation of Rs. 36,23,587 on tenancy rights; b. deleting ad....
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....of the assessee has wrongly been reopened. 5. On the other hand, the ld. D.R. has contended that in the return of income, the assessee had claimed depreciation @ 25% on WDV of an intangible asset; that whereas, a perusal of the records of the assessee showed that this asset represented the tenancy rights in a building which was used by the assessee as its office premises; that therefore, a wrong claim of depreciation had been made by the assessee, which was not allowable and this having resulted into escaped assessment to the tune of Rs. 36,23,587/-, the completed assessment of the assessee was correctly reopened. 6. We have heard the parties on this legal issue. The A.O. recorded the following reasons for reopening the completed assessme....
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.... reasons recorded by the A.O. for invoking reassessment proceeding against the assessee shows that the A.O. entertained a belief of escapement of income, since according to him, the assessee had claimed depreciation in respect of tenancy rights, whereas according to the provisions of section 32 of the I.T. Act, depreciation is allowable only on tangible assets and the amended provisions for depreciation pertaining to intangible assets also does not include within its fold, tenancy rights and that so, due to the wrong claim of depreciation made by the assessee, income had escaped assessment. 8. Thus, evidently, there was no tangible material available with the A.O. at the time of recording of reasons for initiating reassessment proceeding s....