2021 (8) TMI 6

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on claimed by the assessee. 3. The facts relating to the issue are stated in brief. The assessee is a dealer in textiles/readymade garments for men. During the course of assessment proceedings, the A.O. noticed that the assessee has claimed depreciation @ 100% amounting to Rs. 52,03,586/- under the block "furniture & fittings". The assessee had claimed depreciation @ 100% claiming that they are temporary constructions. During the course of assessment proceedings, the A.O. asked the assessee to produce bills & vouchers in support of purchase of furniture and fixtures. The assessee could not produce bills for an amount of Rs. 14,55,919/-. Hence, the A.O. disallowed the same holding that the assessee could not prove the expenditure. For the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f rent. It was submitted that these expenses have been incurred during the time of setting up of the showroom and hence, they have been capitalized in the books of accounts. Considering the rental agreement, the A.O. took the view that electricity charges of Rs. 15,288/-, rent of Rs. 5,00,000/- and shop insurance of Rs. 33,427/- (all related to the premises taken on rent through rental agreement) can be allowed to be capitalized and depreciation @ 10% be allowed. Accordingly, the Ld. CIT(A) confirmed the disallowance of remaining amount and directed to allow depreciation @ 10% on the above said 3 payments. 6. With regard to the disallowance of depreciation on the remaining amount of Rs. 37,47,667/-, the Ld. CIT(A) noticed that the expend....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d. CIT(A) has allowed capitalization of payments related to building. It is a settled proposition that the onus to prove the expenditure lies upon the assessee. Since the assessee has failed to prove the nature of expenditure, I do not find any infirmity in the order passed by Ld. CIT(A) on this issue. 9. The next issue relates to restricting the depreciation to 10% in respect of interior and other expenses incurred on the showrooms. I noticed earlier that the Ld. CIT(A) has given a categorical finding that interiors, furniture and fixtures installed in the year 2008 continued to be used even in the year 2019. Accordingly, the Ld. CIT(A) has observed that these expenses have given enduring benefit to the assessee. These facts clearly dem....