DCIT 2(1)(1), MUMBAI V. BOMBAY STOCK EXCHANGE LTD, MUMBAI

ITA 1138/MUM/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5464 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THARIENOOMMEN
• Keywords: Depreciation; Business expenditure; Earning of tax free income; Cost of acquisition; Revenue expenditure; Rule 8D
• Section: 14A; 201; 139(1)

Judgement Text

1 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR (VICE PRESIDENT) AND SHRI SAKTIJIT DEY (JUDICIAL MEMBER) I.T.A. NO.1138/MUM/2017 - ASSESSMENT YEAR 2011-12 I.T.A. NO.5073/MUM/2019 - ASSESSMENT YEAR 2014-15 DCIT-2(1)(1), MUMBAI VS M/S BOMBAY STOCK EXCHANGE L TD 25 TH FLOOR, DALAL STREET, FORT, MUMBAI-400 001 PAN : AACCB6672L APPELLANT RESPONDENT I.T.A. NO.4693/MUM/2019 (ASSESSMENT YEAR : 2014-15) M/S BOMBAY STOCK EXCHANGE LTD MUMBAI VS ACIT, CIRCLE-2(1)(1), MUMBAI APPELLANT RESPONDENT REVENUE BY SHRI THARIEN OOMMEN, DR RESPONDENT BY SHRI NIRAJ SHETH, AR DATE OF HEARING 01-04-2021 DATE OF PRONOUNCEMENT 04-05-2021 O R D E R PER SAKTIJIT DEY (JM): CAPTIONED APPEALS RELATE TO THE SAME ASSESSEE AND A RISE OUT OF TWO SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME T AX (APPEALS), MUMBAI. THE 2 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 APPEAL FOR ASSESSMENT YEAR 2011-12 IS BY THE REVENU E, WHEREAS, THERE ARE CROSS APPEALS FOR ASSESSMENT YEAR 2014-15. ITA NO.1138/MUM/2017 ASSESSMENT YEAR 2011-12 (REV ENUES APPEAL) 2. THE ONLY ISSUE ARISING FOR CONSIDERATION IN THIS APPEAL RELATES TO DELETION OF DISALLOWANCE MADE UNDER SECTION 14A OF THE INCOME T AX ACT, 1961 R.W.R. 8D. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDEN T COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AS WELL AS UNDER THE SECURI TIES CONTRACT (REGULATIONS) ACT, 1962. THE OBJECT OF THE ASSESSEE, AS NOTED BY T HE ASSESSING OFFICER, ARE AS UNDER:- 'A) TO SUPPORT AND PROTECT THE PUBLIC INTEREST THE CHARACTER AND THE STATUS OF THE BROKERS AND DEALERS AND TO FURTHER TH E INTERESTS BOTH OF BROKERS AND OF THE PUBLIC INTERESTED IN SECURITIES, TO ASSIST, REGULATE AND CONTROL IN THE PUBLIC INTEREST FOR DEALINGS IN SECURITIES, TO ENSURE FAIR DEALING, TO MAINTAIN HIGH STANDARD OF COMMERCI AL HONOUR AND INTEGRITY, AND TO PROMOTE AND INCULCATE HONOURABLE PRACTICES AND JUST AND EQUITABLE PRINCIPLES OF TRADE AND BUSINESS, TO DISCOURAGE AND TO SUPPRESS MALPRACTICES, AND TO SETTLE DISPUTES AND T O DECIDE ALL QUESTIONS OF USAGE, CUSTOM OR COURTESY IN THE CONDU CT OF TRADE AND BUSINESS, B) TO PROMOTE INDUSTRIAL DEVELOPMENT IN THE COUNTRY THROUGH EFFICIENT RESOURCE MOBILIZATION BY WAY OF INVESTMENT IN CORPO RATE SECURITIES.' 4. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE HAD FILED ITS RETURN OF INCOME IN REGULAR COURSE UNDER SECTION 139(1) OF TH E ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASS ESSEE HAD EARNED SUBSTANTIAL EXEMPT INCOME BY WAY OF DIVIDEND AS WELL AS TAX FRE E INTEREST ON BONDS. WHEREAS, THE ASSESSEE DISALLOWED AN AMOUNT OF RS.43,88,000/- COMPRISING OF DIRECT EXPENSES OF RS.21,52,635/- UNDER RULE 8D(2)(I) AND INDIRECT EXPENSES OF RS.22,34,720/- UNDER RULE 8D(2)(III). ON PERUSING T HE DISALLOWANCE COMPUTED BY THE ASSESSEE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAME IS NOT IN 3 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 ACCORDANCE WITH RULE 8D(2) R.W.S. 14A OF THE ACT. T HEREFORE, REJECTING THE COMPUTATION OF THE ASSESSEE, THE ASSESSING OFFICER PROCEEDED TO COMPUTE DISALLOWANCE INDEPENDENTLY AGGREGATING TO RS.9,58,2 8,870/-. THE ASSESSEE, HAVING SUO MOTU DISALLOWED AN AMOUNT OF RS.43,80,000/-, TH E ASSESSING OFFICER MADE A NET DISALLOWANCE OF RS.9,14,40,870/-. ASSESSEE CONT ESTED THE ABOVE DISALLOWANCE BEFORELEARNED COMMISSIONER OF INCOME TAX (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE ASSESSING OFFICER HAS ACCEPTED THE DISALLOWANCE OF DIRECT EXPENSES MA DE BY THE ASSESSEE UNDER RULE 8D(2)(I). FINALLY, HE FOUND, WHILE DECIDING TH E ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007-08, 2008-09, 2009-10, THE TRI BUNAL HAD NOT ONLY OBSERVED THAT THE ASSESSING OFFICER HAS NOT RECORDED PROPER SATISFACTION REGARDING THE DISALLOWANCE MADE BY THE ASSESSEE, BUT ALSO OBSERVE D THAT THE SUO MOTU DISALLOWANCE MADE BY THE ASSESSEE IS CORRECT. THUS, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE PRECEDING ASSESSMENT YEARS, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO FOLLOW THE DECISION OF THE TRIBUNAL, UNLESS,HE BRINGS MATERIALS ON RECORD TO SUBSTANTIAT E THE DISALLOWANCE MADE BY HIM. 4. AT THE OUTSET, SHRI NIRAJ SHETH, THE LEARNED COUN SEL APPEARING FOR THE ASSESSEE SUBMITTED, THE ISSUE IS SQUARELY COVERED B Y THE DECISIONS OF THE TRIBUNAL AND HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE IN EARLIER ASSESSMENT YEARS. IN SUPPORT, HE DREW OUR ATTENTION TO THE OR DERS PASSED BY THE TRIBUNAL FOR ASSESSMENT YEARS 2007-08 TO 2009-10, 2012-13 AND 20 13-14. HE ALSO DREW OUR ATTENTION TO THE ORDERS PASSED BY THE HONBLE JURISD ICTIONAL HIGH COURT IN 4 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10 UPHOLDI NG THE DECISIONS OF THE TRIBUNAL. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, THOUGH, FAIRLY SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISIONS OF THE TRIBUN AL AND HONBLE JURISDICTIONAL HIGH COURT IN PRECEDING ASSESSMENT YEARS; HOWEVER, HE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, FROM ASSESSMENT YEARS 2007-08 ONWARDS THE ASSESSEE HAS BEEN FOLLOWING THE SAME METHODOLOGY FOR COMPUTING DISALL OWANCE UNDER SECTION 14A THE ACT. AS COULD BE SEEN FROM THE FACTS ON RECORD, OUT OF THE TOTAL EXPENSES INCURRED THE ASSESSEE ALLOCATES SALARY PAID TO THRE E EMPLOYEES IN CHARGE OF TREASURY DEPARTMENT TOWARDS DIRECT EXPENSES UNDER R ULE 8D(2)(I). AS REGARDS INDIRECT EXPENSES UNDER RULE 8D(2)(III), THE ASSESS EE ALLOCATES EXPENDITURE ON THE BASIS OF THE AREA OCCUPIED BY THE TREASURY DIVISION . THE DISALLOWANCE COMPUTED BY THE ASSESSEE UNDER SECTION 14A R.W.R. 8D BY FOLLOWI NG THE SAME METHODOLOGY HAS BEEN ACCEPTED NOT ONLY BY THE TRIBUNAL, BUT, BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE PRECEDING ASSESSMENT YEARS. THIS IS EV IDENT FROM THE ORDERS PASSED BY THE TRIBUNAL IN ASSESSMENT YEARS 2007-08, 2008-0 9, 2009-10 IN ITA NOS 895/MUM/2010, 4408/MUM/2012 AND 2836/MUM/2013.THE T RIBUNAL HAS EXPRESSED IDENTICAL VIEW WHILE DECIDING ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 21-08-2019 IN ITA NOS 6224 /MUM/2017 &ORS AND FOR ASSESSMENT YEAR 2013-14 IN ITA NO.6504/MUM/2017 DAT ED 28-01-2019. THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO UPHELD TH E ORDER PASSED BY THE TRIBUNAL IN ASSESSMENT YEARS 2007-08 TO 2009-10. THIS BEING THE UNCONTROVERTED FACTUAL POSITION, RESPECTFULLY FOLLOWING THE DECISIONS OF T HE CO-ORDINATE BENCH AND 5 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FOR PRECEDING ASSESSMENT YEARS, WE UPHOLD THE DECISION OF LEARNED COMMISSION ER OF INCOME TAX (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. ITA NO.5073/MUM/2019, ASSESSMENT YEAR 2014-15 (REVE NUES APPEAL) 8. THE ONLY ISSUE ARISING FOR CONSIDERATION IN THIS APPEAL IS, DELETION OF DISALLOWANCE MADE UNDER SECTION 14A R.W.R. 8D. 9. FACTS RELATING TO ISSUE IN DISPUTE, EXCEPT VARIA TION IN FIGURES, ARE IDENTICAL TO ASSESSMENT YEAR 2011-12 DECIDED BY US IN THE EARLIE R PART OF THE ORDER. THEREFORE, OUR DECISION IN ITA NO.1138/MUM/2007 WOU LD APPLY MUTATIS MUTANDIS TO THE PRESENT APPEAL ALSO. ACCORDINGLY, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE DISMISSI NG THE GROUND RAISED. 10. IN THE RESULT, APPEAL IS DISMISSED. ITA NO.4693/MUM/2019, ASSESSMENT YEAR 2014-15 (ASSE SSEES APPEAL) 11. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSE E READS AS UNDER:- 1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 1,14,26,646/- O N ASSETS TAKEN ON FINANCE LEASE FROM HEWLETT PACKARD FINANCIAL SERVICES PVT. LTD. (HPFS). A) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ['THE CIT(A)'] ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER WHO HAD DISALLOWED THE DEPRECIATION OF RS. 96,00,000/- & RS . 18,26,646/- ON THE SERVERS PURCHASED IN ASSESSMENT YEARS 2011-12 & 201 4-15 RESPECTIVELY FROM HPFS UNDER FINANCE LEASE SCHEME. THE LEARNED C OMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THE FACT THAT SINCE THE APPELLANT HAD PURCHASED THE ASSETS UNDER FINANCE LEASE SCHEME , THEREFORE ARE THE OWNER OF THE ASSETS. YOUR APPELLANT HAD ALSO PA ID INSURANCE PREMIUM AS THE OWNER OF THE ASSETS AND THEREFORE HAD RIGHTL Y CLAIMED DEPRECIATION OF RS. 1,14,26,6467- (RS. 96,00,000/- + RS. 18,26,6 46/-) U/S.32 ON THE SAID ASSETS. THE ASSESSING OFFICER THEREFORE BE DIR ECTED TO ALLOW THE SAME. B) WITHOUT PREJUDICE TO THE ABOVE, THE COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO CONSIDER THE ALTERNATE GROUND O F ALLOWING THE AMOUNT PAID DURING THE YEAR TO HPFS OF RS.48,58,108/- (RS. 74,59,289/- LESS INTEREST RS. 26,01,181/-) AS LEASE RENT AS A REVENU E EXPENDITURE ON WHICH 6 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 THE APPELLANT HAD ALSO DEDUCTED TAX AT SOURCE. THE ASSESSING OFFICER THEREFORE BE DIRECTED TO ALLOW THE SAME. 12. BRIEFLY THE FACTS ARE, IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRE CIATION OF RS.1,14,26,646/- ON A SERVER TAKEN ON FINANCIAL LEASE. NOTICING THAT S IMILAR CLAIM MADE BY THE ASSESSEE IN ASSESSMENT YEAR 2012-13 WAS DISALLOWED, THE ASSE SSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY SIMILAR DISALLOWANCE SHOULD NOT BE MADE. THOUGH, THE ASSESSEE OBJECTED TO THE PROPOSED DISALLOWANCE; HOWE VER, THE ASSESSING OFFICER, RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ICDS LTD, HELD THAT THE ASSESSEE NOT BEING THE OWNER OF THE ASSET, DEPRECIATION CANNOT BE ALLOWED. THOUGH, THE ASSESSEE CONTESTED THE AFORESA ID DISALLOWANCE BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HOWEV ER, IT WAS UNSUCCESSFUL. 13. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, AS FAR AS THE DEPRECIATION CLAIMED ON OLD SERVER COSTING RS.25 CRORES TAKEN ON FINANCIAL LEASE, THE ASSET HAD ENTERED INTO THE RELEVANT BLOCK OF ASSETS IN ASSESS MENT YEAR 2011-12. HE SUBMITTED, AS AN OWNER OF THE ASSET, ASSESSEE HAD I NCURRED THE ENTIRE COST AND PUT THE ASSET TO USE. THE ASSESSEE HAD ALSO INSURED THE ASSET. THEREFORE, THE ASSESSEE IS ELIGIBLE TO CLAIM DEPRECIATION ON THE A SSET. FURTHER, HE SUBMITTED, THE ASSESSING OFFICER HIMSELF HAS ALLOWED DEPRECIATION IN ASSESSMENT YEARS 2013-14, 2016-17 AND 2017-18. FURTHER, HE SUBMITTED, THOUGH IN ASSESSMENT YEAR 2015-16 THE ASSESSING OFFICER DID NOT ALLOW DEPRECIATION, B UT, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALLOWED ASSESSEES CLAIM. 14. AS REGARDS DEPRECIATION ON SERVER, STORAGE AND ACCESSORIES PROCURED DURING THE YEAR THROUGH AN AGREEMENT WITH HEWLETT PACKARD SERVICES LTD, THE LEARNED COUNSEL SUBMITTED, THE ASSESSEE HAD INCURRED THE CO ST AND HAD ALSO PAID THE 7 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 INSURANCE PREMIUM ON THE ASSET. THEREFORE, ASSESSEE IS THE OWNER OF THE ASSET AND ELIGIBLE TO CLAIM DEPRECIATION. FURTHER, HE SUB MITTED, THE INTEREST PAID ON LEASE HAS BEEN ALLOWED AS BUSINESS EXPENDITURE BY T HE ASSESSING OFFICER. FURTHER, HE SUBMITTED THOUGH IN ASSESSMENT YEAR 2015-16 ASSE SSING OFFICER DID NOT ALLOW DEPRECIATION ON THIS ASSET, BUTEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED IT.WHEREAS, THE ASSESSING OFFICER HIMSELF H AS ALLOWED DEPRECIATION IN ASSESSMENT YEARS 2016-17 AND 2017-18. 15. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGL Y RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND EARNED CO MMISSIONER OF INCOME TAX (APPEALS). 16. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D MATERIALS ON RECORD. AS FAR AS THE DEPRECIATION CLAIMED ON THE OLD SERVER, IT HAS ENTERED THE BLOCK OF ASSETS IN ASSESSMENT YEAR 2011-12. IT IS OBSERVED, THE TRIBUNAL WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE IN ASSESSMEN T YEAR 2012-13 VIDE ITA NO.6224/MUM/2017 & ORS DATED 21-08-2019, HAS ALLOWE D ASSESSEES CLAIM OF DEPRECIATION HOLDING AS UNDER:- 8. WE NOTED THAT THE ASSESSEE COMPANY HAS INSTALLE D SERVERS AT A COST OF 25 CRORES FROM HPFS DURING THE FINANCIAL YEAR 2010-11 UNDER F INANCE LEASE SCHEME. THE ASSESSEE AS PER AS-19 CAPITALIZED THE SAID AMOUNT IN THE BOO KS OF ACCOUNT. THE ASSESSEE CLAIMED DEPRECIATION ON THE COST OF ACQUISITION IN EARLIER YEARS WHICH WERE ALLOWED BY THE ASSESSING OFFICER. IT WAS CLAIMED THAT THE ASSESSEE COMPANY IS THE OWNER OF THE SERVER AND THEY HAVE TO TAKE OUT INSURANCE POLICY AND PAID THE INSURANCE PREMIUM TO COVER VARIOUS RISKS ATTACH TO IT AND ASSESSEE COMPANY IS THE ONLY USER OF THE SERVER. IN TERM OF THE ABOVE FACTS, THE ASSESSEE CLAIM DEPRECIATION ON THE WDV AT THE RATE APPLICABLE TO FIXED ASSETS. IT WAS CLAIMED THAT THE ASSESSEE COMP ANY HAS NOT CLAIMED ANY AMOUNT OF REVENUE EXPENDITURE EXCEPT INTEREST PAID TO HPFS AM OUNTING TO 1,03,70,798/- AND THIS WAS CLAIMED UNDER THE HEAD OF FINANCE COST. WE NOTE D THAT THE AO HAS DISALLOWED DEPRECIATION OF 6 CRORES ON THE GROUND THAT HPFS HAS CLAIMED DEPRECIATION ON THE SAID ASSET NOT ONLY IN THIS YEAR BUT IN SUBSEQUENT YEARS . THE ASSESSEE BEFORE US EXPLAINED THAT THE INCOME TAX DEPARTMENT FOR AY 2009-10 HAS ALREAD Y DISALLOWED THE CLAIM OF DEPRECIATION IN THE HANDS OF THE HPFS. WE NOTED THA T IN THE VERY FIRST YEAR I.E. AY 2011- 12, THE DEPRECIATION HAS ALREADY ALLOWED THE CLAIM OF DEPRECIATION. WE NOTED THAT IN THE INCOME TAX CODE, THERE IS A PROVISION/ CONCEPT OF B LOCK OF ASSET AND ONCE ANY ASSET 8 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 ENTERS INTO BLOCK ASSET AND CLAIM OF DEPRECIATION I N VERY FIRST YEAR IS ALLOWED, IN SUBSEQUENT YEAR THE DEPRECATION CANNOT BE DISALLOWE D IN CASE THE FIRST YEAR IS NOT DISTURBED. WE NOTED THAT EVEN IN SUBSEQUENT YEARS, THE REVENUE IS ALLOWING THE CLAIM OF THE ASSESSEE AS NOTED IN ABOVE CHART. HENCE, WE AL LOW THE CLAIM OF DEPRECIATION ON THE ISSUE OF CONSISTENCY. THIS ISSUE OF ASSESSEES APPE AL IS ALLOWED. 17. PERTINENTLY, LEARNED COMMISSIONER OF INCOME TAX (APPEALS), WHILE UPHOLDING THE DISALLOWANCE, HAS RELIED UPON THE ORD ER PASSED BY HIM IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2012-13, WHICH NOW STAN DS REVERSED BY THE TRIBUNAL. IT IS FURTHER OBSERVED FROM THE MATERIAL ON RECORD, ASSESSEES CLAIM OF DEPRECIATION IN RESPECT OF THIS PARTICULAR ASSET HA S BEEN ALLOWED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ASSESSMENT YEAR 2015-16 AND BY THE ASSESSING OFFICER HIMSELF IN ASSESSMENT YEARS 2016- 17 AND 2017-18. KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2012- 13, AS REFERRED TO ABOVE, AND ALSO THE FACT THAT TH E CLAIM OF DEPRECIATION HAS BEEN ALLOWED IN SUBSEQUENT ASSESSMENT YEARS, WE DIRECT T HE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEPRECIATION ON THE OLD ASSET ( SERVER), AS CLAIMED. 18. AS REGARDS THE CLAIM OF DEPRECIATION ON THE NEW SERVER, STORAGE AND ACCESSORIES PROCURED DURING THE YEAR THROUGH LEASE AGREEMENT, IT IS A FACT ON RECORD THAT THE ASSESSEE HAS INCURRED THE COST OF S UCH ASSET BY MAKING PAYMENT THROUGH INSTALMENTS. THE ASSESSEE IS ALSO PAYING IN TEREST ON LEASE. THE ASSESSING OFFICER, THOUGH, HAS DISALLOWED THE DEPRECIATION; H OWEVER, HE HAS ALLOWED THE INTEREST PAID ON LEASE AS BUSINESS EXPENDITURE. ON PERUSAL OF THE MATERIAL ON RECORD, WE DO NOT FIND ANY PERCEPTIBLE DIFFERENCE B ETWEEN THE OWNERSHIP STATUS OF THE SERVER PURCHASED EARLIER AND THE SERVER PURC HASED DURING THE YEAR. IN OTHER WORDS, ACQUISITION OF BOTH THE ASSETS ARE MORE OR L ESS ON A SIMILAR TERMS AND CONDITIONS AND WOULD STAND ON THE SAME FOOTING. MOR EOVER, AS WE FIND, CLAIM OF 9 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 DEPRECIATION ON THE NEWLY ACQUIRED ASSET WAS ALLOWE D BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ASSESSMENT YEAR 2015-16 AND BY THE ASSESSING OFFICER HIMSELF IN ASSESSMENT YEARS 2016-17 AND 2017-18. TH IS BEING THE FACTUAL POSITION, IN OUR CONSIDERED VIEW, ASSESSEE IS ELIGIBLE TO CLA IM DEPRECIATION ON THE NEWLY ACQUIRED SERVER, STORAGE AND ACCESSORIES. THEREFORE , WE DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEPRECIATION A S PER LAW. WE MAY FURTHER OBSERVE, ON CAREFUL READING OF THE HONBLE APEX COU RTS DECISION RELIED UPON BY THE ASSESSING OFFICER, WE ARE OF THE VIEW THAT THE RATIO LAID DOWN THEREIN WOULD NOT APPLY TO THE FACTS OF THE PRESENT APPEAL. MORE SO, WHEN THE ASSESSING OFFICER HIMSELF HAS ALLOWED DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEARS. 19. IN VIEW OF OUR DECISION ABOVE, THE ALTERNATIVE CONTENTION MADE BY THE ASSESSEE REGARDING ALLOWANCE OF LEASE RENTAL AS DED UCTION, HAVING BECOME REDUNDANT, IS NOT DELIBERATED UPON. 20. IN THE RESULT, APPEAL IS ALLOWED. 21. TO SUM UP, REVENUES APPEALS ARE DISMISSED AND ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON 04/05/2021. SD/- SD/- PRAMOD KUMAR SAKTIJIT DEY VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DT : 04/05/2021 PAVANAN 10 ITAS1138/MUM/2017. 4693/MUM/2019 & 5073/MUM/2019 COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI