2019 (12) TMI 613

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion. 3. Ground No. 2 relates to the addition of Rs. 63.36 lakhs added by the Assessing Officer as rental income by adding security deposit. 4. Ground No. 3 relates to the disallowance of Rs. 65,22,615/- on account of depreciation and interest on capital. 5. Briefly stated, the facts of the case are that the assessee filed its return of income on 23.09.2015 declaring total loss of Rs. 20,61,555/-. Return was selected for scrutiny assessment under CASS and accordingly, statutory notices were issued and served upon the assessee. 6. During the course of scrutiny assessment proceedings and on perusal of the audit report and financial notes, the Assessing Officer found that the assessee has declared rental income only for six months a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 12. Before us, the ld. AR brought to our notice the decision of the Hon'ble High Court of Delhi in assessee's own case in CS(COMM) 75/2016 IA 1588/2016 and pointed out that the Hon'ble High Court, vide order dated 06.04.2016 decreed in favour of the assessee and against the tenant with the direction that the property should be handed over to the assessee. 13. It is the say of the ld. counsel for the assessee that it was not possible for the assessee to adjust the security deposit as the litigation was pending before the Hon'ble High Court and further, the security deposit was not adjustable against the unrealized rent as the tenants also filed suit for recovery of security deposit. The ld. counsel for the assessee furthe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dition and sustaining the addition. Considering the facts of the case in totality, addition of Rs. 63.36 lakhs is unwarranted and deserves to be deleted. Accordingly, Ground No. 2 is allowed. 17. Ground No. 3 relates to the disallowance of depreciation on car amounting to Rs. 45.31 lakhs and interest on car loan amounting to Rs. 19.91 lakhs. 18. A perusal of the assessment order shows that these amounts have been disallowed by the Assessing Officer solely on the ground that during the year under consideration, the assessee did not carry out any business activity. The disallowance was confirmed by the ld. CIT(A). 19. Before us, the ld. counsel for the assessee stated that it is incorrect to say that the assessee did not carry out an....