2022 (7) TMI 264

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....tances of the case by sustaining the disallowance of Rs. 5,00,000/- out of depreciation on Building as depreciation on land made by learned Assessing Officer. Learned CIT(A) has reversed the decision of his own court by disagreeing with the view taken by the earlier CIT(A) in this case only for the AY 2010-11. 2. Disallowance of Rs. 2,82,289/- out of depreciation on Building. Learned Commissioner of Income Tax (Appeal) has further erred in law, facts and circumstances of the case by confirming the disallowance of Rs. 2,82,289/- aut of depreciation on Building. 3. Disallowance of Rs. 1,44,436/- out of Telephone Expenses. Learned Commissioner of Income Tax (Appeal) has again erred in law, facts and circumstances of the case by sustain....

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....ent, Assessing Officer made disallowance on account of depreciation of Rs. 5,00,000/- on the ground that land portion included in the building was not eligible for depreciation. Further he noted that part of the building was rented and assessee has claimed deduction u/s. 24 of the Income-tax Act, 1961 (for short 'the Act'). He made further proportionate disallowance amounting to Rs. 2,82,289/-. Further AO made ad hoc disallowance of 20% on account of telephone expenses and 30% on account of depreciation on car & vehicle repair maintenance. Further he made disallowance u/s. 40A(3) amounting to Rs. 2,61,200/-. 4. Against the above order, assessee filed an appeal before the Ld. CIT(A). Ld. CIT(A) confirmed all the additions. 5. Again....

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....000/-. The Ld. AR pointed out that the assessee purchased the fully constructed building i.e. Industrial built up factory and the design and layout of the structure of the building was best suitable to the business of the assessee. All consideration for purchase were made only keeping in view the suitability of building structure for assessee's business. The Ld. AR submitted that in earlier assessment year as well as in subsequent Assessment Years, the same has been allowed on building by the Revenue Department and there is a change of opinion/stand in this particular year as well as in Assessment Year 2013-14. 6. The Ld. DR relied upon the Assessment order and order of the CIT(A). 7. We have heard both the parties and perused the m....

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....he land and building constructions and the same will frustrate the very purpose of the provisions if it is done so. The Hon'ble High Court further held that it is also essential to point that the Revenue is not put to any loss by adopting such method and allowing depreciation as the same forms part of the block of assets even when that particular asset is not in use in the relevant Assessment Year. The assessee's case is squarely covered by the decision of the Hon'ble Delhi High Court in case of oswal Agro Mills Ltd. Hence, Ground No. 2 is allowed." 10. The issue of ad hoc disallowance was also dealt with by the ITAT and finding that no cogent material was produced by the AO for the disallowance, the same was deleted. We find t....