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Facts
The Assessing Officer disallowed depreciation on paintings for AYs 2014-15 and 2017-18, treating them as personal effects. The assessee argued that the issue was covered by previous Tribunal orders in its own case (AYs 2008-09 to 2010-11), which held the cost of paintings to be revenue expenditure under Section 37, rendering the current depreciation dispute infructuous.
Held
The Tribunal accepted the assessee's contention, noting that Coordinate Bench orders in the assessee's own case for earlier assessment years had already allowed the entire purchase cost of paintings as revenue expenditure under Section 37. Consequently, the present appeals regarding depreciation on the same paintings were held to be infructuous.
Key Issues
Whether the disallowance of depreciation on paintings was justified, considering prior Tribunal rulings allowed their full cost as revenue expenditure under Section 37.
Sections Cited
Section 37 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
Appellant by Sh. Deepesh Jain & Sh. Shourya Jain, CA Respondent by Sh. Amit Katoch, Sr. DR Date of Hearing 23/09/2024 Date of Pronouncement 23/09/2024 ORDER PER AVDHESH KUMAR MISHRA, AM Common grounds and facts arise in the above captioned appeals of the assessee; therefore, these appeals were heard together and are being disposed off by this common order.
Both appeals for the Assessment Years (hereinafter, the ‘AY’) 2014- 15 & 2017-18 filed by the assessee is directed against the orders dated 09.10.2019 & 27.08.2020 respectively, passed by the Commissioner of Income Tax (Appeals)-9, New Delhi [hereinafter, the ‘CIT(A)’]. 1 3. The sole issue for determination, in both years, before us is that whether the CIT(A) is justified in upholding the disallowance of depreciation of Rs.7,90,264/-and Rs.21,03,277/- on Paintings in AYs 2014-15 & 2017-18 respectively holding that these are of personal effect in nature.
The brief facts of the case for deciding these appeals are that the Assessing Officer (hereinafter, the ‘AO’) disallowed the claim of depreciation on Paintings debited to Profit & Loss Account. The disallowance made on this score is Rs.7,90,264/- in the AY 2014-15 whereas it is Rs.21,03,277/- in the AY 2017-18.
The Ld. Authorised Representative (hereinafter, the ‘AR’) contended that the similar disallowances of depreciation on Paintings were made in AYs 2008-09 to 2010-11. The appellant/assessee raised additional ground before the Tribunal that the purchase costs of painting were revenue in nature and therefore, the entire purchase costs had to be allowed under section 37 of the Income Tax Act, 1961 (hereinafter, the ‘Act’) instead of depreciation thereon. Our attention was drawn to the Tribunal’s finding in the appellant/assesse’s own case in AYs 2008-09 to 2010-11, where in the purchase costs of paintings were held as revenue in nature and allowed the entire purchase costs of paintings under section 37 of the Act as against the dispute of the depreciation thereon in the 6512/Del/2013 and 1226 & 1227/Del/2015. The Ld. AR; therefore, contended that these appeals had become infructuous as of now after allowance of entire purchase costs of paintings as expenditure in earlier years. Hence, he requested for dismissal of these appeals. To which, the Ld. Sr. Departmental Representative (hereinafter, the ‘Sr. DR’) did not object to.
We have heard both the parties. We found merit in the submission of the Ld. AR. In view of the Coordinate Bench order in the appellant/assessee’s case in the 6512/Del/2013 and 1226 & 1227/Del/2015, both the captioned appeals, being infructuous, are dismissed as such.
In the result, both appeals of the assessee stand dismissed. Order pronounced in open Court on 23rd September, 2024