TAPAN KUMAR BISWAS,KOLKATA vs. I.T.O.,WARD-7(1), KOLKATA

At the outset, it is noted that there is a delay of 2 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, an application seeking condonation of the said delay is filed by the assessee and keeping in view the reasons given therein, I am satisfied that there was a sufficient cause for the delay of 2 days on the part of the assessee in filing this appeal before the Tribunal. Even the learned DR has not raised any objection in this regard. I, therefore, condone the said delay and proceed to dispose of the appeal of the assessee on merit.

The assessee in the present case is an individual who is engaged in the business of advertisement through display of banner, hoardings

Assessment Year: 2009-10 Tapan Kumar Biswas and mobile van. In the assessment originally completed u/s 143(3) vide an order dated 04.11.2011, the total income as declared by the assessee in his return of income at Rs. 11,26,360/- was accepted by the AO. The record of the said assessment came to be examined by the concerned Ld. CIT(A) and on such examination, he found that there was an error in the assessment order passed u/s 143(3) in allowing the claim of the assessee for depreciation at higher rate of 40% and 30% on hoardings and mobile display car respectively as against the admissible rate of 15%. Since the said error was prejudicial to the interest of the revenue, the order passed by the AO u/s 143(3) was set aside by the Ld. CIT vide an order dated 24.03.2014 passed u/s 263 with the direction to the AO to make the assessment afresh on the issue of correct rate of depreciation allowable on hoardings and mobile display car after making necessary enquiry. As per the direction of the Ld. CIT, a fresh assessment was completed by the AO vide an order dated 27.02.2015 passed u/s 143(3)/263 of the Act wherein he allowed depreciation to the assessee on hoardings and mobile display car only to the extent of 15% which resulted a disallowance of Rs. 12,65,566/-. On appeal, the Ld. CIT(A) confirmed the said disallowance made by the AO. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. As rightly contended by the learned counsel for the assessee, hoardings used for the purpose of advertisement has been treated as temporary structure by this Tribunal in various cases which is eligible for depreciation at 100%.

As far as the depreciation claimed at higher rate of 40% on the car used for display of advertisement, it is observed that the depreciation at higher rate is allowed on the motor vehicle only if it is used by the assessee in the business of running the same on hire. Keeping in view the nature of the assessee’s business, I am of the view that the vehicle used for display of advertisement cannot be said to have used in the business of running the same on hire and the assessee therefore is not entitled to a higher rate of depreciation on such vehicles. I therefore, uphold the impugned order of the Ld. CIT(A) confirming the disallowance made by the AO on account of assessee’s claim for depreciation at a higher rate on vehicle.

In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 5th June, 2020.