What did the Tribunal hold?

The Tribunal upheld the disallowance of depreciation, stating that while depreciation is allowable during a business lull, the assessee failed to provide evidence that the assets were used in another business.

The assessee claimed depreciation on assets, arguing that there was a lull in business activity and the assets were used in another business. The Assessing Officer and CIT(A) disallowed the claim.

What were the issues?

Whether depreciation is allowable on assets when there is a lull in business activity and the assets are allegedly used in another business, and the burden of proof on the assessee.

S.M. Arshad, Mangalore vs DCIT | ITAT Bangalore 2016

Income Tax Appellate Tribunal, ‘C’ BENCH, BANGALORE

Before: SHRI VIJAY PAL RAO & SHRI INTURI RAMA RAOShri S.M.Arshad,

For Appellant: Shri R.Krishnan, CA

For Respondent: Shri Sanjay Kumar, CIT(DR)

Hearing: 25/07/2016Pronounced: 19/08/2016

Per INTURI RAMA RAO, AM :

This is an appeal filed by the assessee directed against the order of the CIT(A)-VI, Bangalore, dated 16/08/2012 for the assessment year 2008-09.

2 The only ground of appeal raised by the assessee in this appeal is with regard to disallowance of depreciation claim. The Assessing Officer disallowed the claim for depreciation on the Page 2 of 3 ground that the assessee had not carried out any business activity during the previous year relevant to assessment year under consideration. The submission made before the AO was that there was only lull in the business activity of the assessee in Pizza corner and in fact, assets were used in the business of of Mohtisham Enterprises. The contentions of the assessee were not accepted by the AO as well as the CIT(A).

Before us, learned AR of the assessee reiterated the submissions made before the lower authorities.

We heard rival submissions and perused the material on record. There is no quarrel about proposition canvassed by the assessee that depreciation is allowable even in case where there is lull in the business activity of the assessee but there is no evidence brought on record in support of the contention that there was only lull in the business activity and the assets were used in some other business of the assessee. In absence of evidence, we are unable to appreciate the contention of the assessee and uphold the orders of the lower authorities. Grounds of appeal raised by the assessee are dismissed.

Page 3 of 3 5. In the result, appeal filed by the assessee is dismissed.

S.M. ARSHAD,MANGALORE vs. DCIT, BANGALORE

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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