PREMIER BOOK CO.,NEW DELHI vs. ACIT, NEW DELHI

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ITA 6583/DEL/2016Status: DisposedITAT Delhi10 February 2022AY 2013-1410 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal followed a previous decision of a coordinate bench that allowed depreciation on tenancy rights. Therefore, the AO was directed to delete the addition made on account of disallowance of depreciation.

What were the facts?

The assessee claimed depreciation on tenancy rights for its business premises. The AO disallowed the claim, citing similar disallowances in previous years. The CIT(A) upheld the AO's decision.

What were the issues?

Whether depreciation is allowable on tenancy rights acquired for business purposes. Whether the AO can disallow depreciation based on previous years' disallowances when a coordinate bench has ruled in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Before: SH. N. K. BILLAIYA

Hearing: 10/02/2022Pronounced: 10/02/2022

This appeal filed by the assessee is preferred against the order of the CIT(A)-18, New Delhi dated 13.10.2016 for A.Y. 2013-14.

2.

The solitary grievance of the assessee is that the CIT(A) erred in confirming the disallowance of depreciation of Rs.2,28,406/- in respect of tenancy rights acquired in respect of the premises used by the assessee wholly and exclusively for the purpose of its business.

3.

Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the AO noticed that the assessee has claimed depreciation of Rs.228406/- @ 25% on tenancy rights. The assessee was asked to justify the claim. In its reply the assessee stated that it had claimed depreciation in respect of tenancy rights for the first time in A.Y. 2008-09 and thereafter similar claims were made in subsequent assessment years. It was further pointed out that similar disallowance was made for the first time in A.Y.2010-11. The AO was of the opinion that since similar disallowance was made in earlier assessment years, therefore, proceeded by disallowing Rs.228406/-.

4.

The assessee carried the matter before the CIT(A) but without any success.

5.

We have carefully perused the orders of the authorities below. We find that this Tribunal in A.Y. 2010-11 in order dated 11.08.2021 as allowed the claim of depreciation. The relevant findings of the coordinate Bench read as under :-

6.

Respectfully following the decision of the coordinate Bench (supra) we direct the AO to delete the addition of Rs.228406/-. The appeal filed by the assessee is allowed.

7.

The order is pronounced in the open court on 10.02.2022 in the presence of both the rival representatives.

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