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Facts
The Assessing Officer disallowed depreciation claimed by The Hindustan Times Ltd. on paintings for AYs 2014-15 and 2017-18, treating them as personal effects. The assessee appealed, arguing that the purchase costs of these paintings were revenue in nature and should be allowed as expenditure under Section 37 of the Income Tax Act. They cited previous Tribunal orders in its own case where this position was upheld for earlier assessment years.
Held
The Tribunal noted that a Coordinate Bench, in the assessee's own case for AYs 2008-09 to 2010-11, had already held the purchase costs of paintings to be revenue expenditure allowable under Section 37. Given this precedent and the allowance of the entire purchase costs as expenditure in earlier years, the current appeals regarding depreciation on the same paintings became infructuous and were dismissed.
Key Issues
Whether depreciation claimed on paintings should be disallowed by treating them as personal effects, or if their purchase cost is revenue expenditure allowable under Section 37 of the Income Tax Act.
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 , 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