TaxTMI 
TaxTMI 
2026 (8) TMI 1241
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....rein consideration amount of Rs. 2,03,68,000/- has also duly been also acknowledged. 3. Subsequently, the Assessee on dated 25.03.2014 purchased properties/two offices bearing no.168 and 668 on 1st floor and 2nd floor of the building namely Kamla Industrial Park, Mumbai on a consideration of Rs. 2,08,76,204/- and treated/introduced the said offices, as new asset and /or being part of block of assets. 4. The AO, though considered the aforesaid claim of the Assessee introducing the new offices in the block of asset, however, refused to entertain the claim of the Assessee by observing interalia: (i) That these office premises/units were acquired vide agreement dated 25.03.2014 i.e. at the fag end of the order. (ii) Further, from the copy of the agreement submitted, it was observed that only part payment was made by the Assessee. (iii) Possession of the property was not received by the Assessee as on 31.03.2014. (iv) Further, the new assets were not put to use for business purposes during the financial year under consideration and therefore, the addition to the fixed asset was "NIL" and consequently depreciation was also "NIL". (v) and....
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....onsideration and endorsed as new asset in the block of assets. 12. We observe that both the authorities below declined to consider the aforesaid properties, as being part of the capital block of assets, mainly on the following reasons: - (i) The properties were acquired vide agreement dated 25.03.2015 i.e. at the fag end of the year. (ii) Only part payment was made by the Assessee. (iii) No possession of the property was given to the Assessee, therefore, the property was not put to use for business purposes and, (iv) The consideration amount for new office was just an advance towards purchase of office premises. 13. The Authorities below, while denying the claim of new asset/increase of block of assets, relied on the provisions of section 50 of the Act. The Assessee before us, demonstrated that in the provisions of section 50 of the Act, there is only requirement that new property has to be acquired but it does not contemplate the use of the property to complete the process of acquisition of property and simply on the basis of non-possession of the property, the benefit of section 50 of the Act, which is otherwise beneficial provision, cann....
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....ation already availed of by each asset eligible for depreciation. In order to simplify the existing cumbersome provisions, the Amending Act has introduced a system of allowing depreciation on block of assets. This will mean the calculation of lump-sum amount of depreciation for the entire block of depreciable assets in each of the four classes of assets namely, building, machinery, plant and machinery." This shows that the main object of introducing the block of assets concept was only to reduce time and effort spent in detailed record maintenance. While giving effect to this object, there could have been no justification or warrant for prescribing a condition that the new asset, in addition to being an asset in respect of which the same rate of depreciation is prescribed as in the case of the other assets within the class, should also be used in a business carried on by the assessee. In the case of a building, the new building purchased should be one in respect of which the same rate of depreciation, as is prescribed in respect of the other buildings, has been prescribed by the rules. If the assessee carries on a business, in that case he would also be eligible for an all....
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....nded over to the assessee-firm by the builder directly after the vendor receives the full and final payment under the agreement, the legal possession of the building must be taken to be with the assessee. Even otherwise the vendor is none else than one of the partners of the assessee-firm and after the signing of the agreement she must be taken to hold the flat for and on behalf of the firm in her capacity as the partner thereof and not in her individual or separate capacity. Therefore, the possession must also be taken to have been with the assessee-firm with effect from 18-3-1995" 17. We further observe that the Hon'ble Coordinate Bench of the Tribunal in the case of Indigogem Vs. ITO (2016) 160 ITD 405 (Mum.) also dealt with the issue, wherein the possession of the property was not given to the then Assessee and the Hon'ble Co-ordinate Bench of the Tribunal has held that once the entire sale consideration was paid and terms of agreement are reduced into writing by way of allotment letter, the asset could be taken to be duly acquired. Further, Section 50 does not contemplate possession/use of the property. 18. We further observe that Hon'ble Apex Court in the case of Fibre ....