M/s. Pharma Traders Pvt. Ltd., Indore V. The I.T.O., Indore

ITA 128/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47860 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MITRA
• Assessee Lawyers: MANOJ PHADNIS
• Keywords: Business income; Depreciation
• Section: 143(3); 32; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA , AM ITA NO.128/IND/2010 A.Y. 2006-07 M/S. PHARMA TRADERS PVT. LTD. INDORE PAN AADCP 3277 A APPELLANT VS. ITO-3(3), INDORE RESPONDENT APPELLANT BY SHRI MANOJ PHADNIS, CA RESPONDENT BY SHRI PRADEEP KUMAR MITRA, SR. DR ORDER PER R.C. SHARMA, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-I, INDORE, DATED 4.12.2009 FOR THE AY 2006-07 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE I.T. A CT, 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 3. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PRI VATE LIMITED COMPANY AND RUNNING ITS BUSINESS FROM THE P REMISES SITUATED AT 4/7, LASUDIA MORI, DEWAS NAKA, INDORE ( MP), -: 2: - 2 HAVING TWO SHAREHOLDERS AND DIRECTORS, NAMELY, SUBH ASH AGARWAL AND GULAB AGARWAL. ASSESSEE WAS HAVING A SI STER CONCERN M/S. PHARMA TRADERS, CONSISTING OF SAME PER SONS, WHO ARE SHAREHOLDERS CUM OWNER OF ASSESSEE COMPANY. IT EXECUTED A LEASE AGREEMENT DATED 14 TH JUNE, 2005, WITH ITS SISTER CONCERN M/S. PADMA TRADERS CONSISTING OF THE SAME PERSONS AS A PARTNER, WHO ARE ALSO DIRECTORS IN THE ASSESSEE COMPANY. AS PER THE TERMS OF THE LEASE AGREEMENT , MONTHLY RENT OF RS. 2.50 LAKHS WAS TO BE PAID TO THE ASSESS EE EVERY MONTH. THE AGREEMENT WAS EFFECTIVE FOR A PERIOD OF 10 YEARS. THE SISTER CONCERN ALSO AGREED TO PAY RS. 15 LAKHS INTEREST FREE DEPOSIT WITH THE ASSESSEE COMPANY, WHICH WILL BE RE FUNDABLE ON THE EXPIRY OF THIS AGREEMENT. HOWEVER, WHEN THE LEASE AGREEMENT WAS EXECUTED, THE BUILDING WAS UNDER CONS TRUCTION, WHICH WAS COMPLETED IN THE MID OF NOVEMBER 2005 AND ACTUAL POSSESSION WAS ALSO GIVEN FROM 15 TH NOVEMBER, 2005. ACCORDINGLY, THE ASSESSEE HAS OFFERED RENTAL INCOME FROM 15 TH NOVEMBER, 2005 UP TILL 31 ST MARCH, 2006. THE ASSESSEE OFFERED THE RECEIPT AS BUSINESS INCOME BY INCORPORATING THE RECEIPTS IN ITS PROFIT AND LOSS ACCOUNT. IN THE COURSE OF SCRUT INY -: 3: - 3 ASSESSMENT, THE AO COMPUTED THE RENTAL INCOME WITH EFFECT FROM THE DATE OF EXECUTION OF THE AGREEMENT I.E. 14 TH JUNE, 2005, AND ADDED THE RENT FOR THE PERIOD 14 TH JUNE, 2005, TO 15 TH NOVEMBER, 2005, IN THE TOTAL INCOME OF THE ASSESSE E. AS PER THE AO, THE LEASE AGREEMENT WAS EFFECTIVE FROM 14.6.2005, THEREFORE, THE LEASE INCOME ACCRUED TO THE ASSESSEE W.E.F. 14 TH JUNE, 2005. THE AO ALSO CHANGED THE HEAD OF INCOME, WHICH WAS SHOWN BY THE ASSESSEE AS BUSINESS INCOME LIABLE TO TAX U/S 28. THE CONTENTION OF THE ASSESSEE WAS THAT PRE MISES WAS GIVEN TO THE SISTER CONCERN WITH ALL INFRASTRUCTURE FACILITY FOR USING ON COMMON SHARING BASIS. THE ASSESSEE WAS ALS O USING THE SAME BUILDING AND DOING ITS BUSINESS AND DURING THE YEAR UNDER CONSIDERATION, IT HAS ACHIEVED SALES TURNOVER OF RS. 74.38 LAKHS. THE ASSESSEE COMPANY WAS CONTINUING TO CARRY ON THE NORMAL BUSINESS ACTIVITIES FROM THE VERY SAM E PREMISES ONLY, WHICH IS EVIDENT FROM ITS AUDITED PR OFIT AND LOSS ACCOUNT AND BALANCE SHEET FILED ALONGWITH THE RETUR N TOGETHER WITH AUDITORS REPORT. THE AO ALSO DECLINED ASSESSE ES CLAIM FOR DEPRECIATION ON THE BUILDING BY STATING THAT BUILDI NG WAS GIVEN ON RENT, INCOME OF WHICH IS ASSESSABLE AS INCOME FR OM HOUSE -: 4: - 4 PROPERTY, THEREFORE, THE ASSESSEE WAS NOT ELIGIBLE FOR ANY CLAIM OF DEPRECIATION ON SUCH BUILDING. BY THE IMPUGNED O RDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO AND THE A SSESSEE IS IN FURTHER APPEAL BEFORE US. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSES SEE: GROUND NO.1: ENHANCEMENT OF THE RENT RECEIVABLE/RECEIVED FROM RS.11,26,150/- TO RS.23,75,000/- 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. AO WHO HAS INCREASED THE RENT RECEIVED/RECEIVABLE FROM RS.11,26,250/- TO RS.23,75,000/-. 1.2 THAT THE ENHANCEMENT OF THE RENT RECEIVED/RECEIVABLE CONFIRMED BY LD. CIT(A) TO RS.23,75,000/- IS BAD IN LAW AS NO INCOME HAS ACCRUED TO THE ASSESSEE OVER AND ABOVE THE SUM OF RS.11,26,150/- WHAT HAS ALREADY BEEN INCLUDED IN THE COMPUTATION OF INCOME. 1.3 THAT THE ADDITION MADE BY THE LD. AO AND AS CONFIRMED BY THE LD. CIT(A) IS WRONG AND CONTRARY TO THE FACTS OF THE CASE AND THEREFORE THE ADDITIONS SO MADE MAY PLEASE BE DELETED. -: 5: - 5 GROUND NO.2: CHANGE IN THE HEAD OF INCOME FOR THE RENT RECEIVED/RECEIVABLE FROM THE HEAD INCOME FROM BUSINESS/PROFESSION TO THE HEAD INCOME FROM HOUSE PROPERTY 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. AO WHO HAS CHANGED THE HEAD OF THE INCOME FROM INCOME FROM BUSINESS/PROFESSION TO THE HEAD INCOME FROM HOUSE PROPERTY. GROUND NO.3: DISALLOWANCE OF DEPRECIATION OF RS.9,67,895/- 3.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. AO IN DISALLOWING THE CLAIM OF DEPRECIATION OF RS.9,67,895/- ON THE BUILDING WHICH HAS BEEN USED BY THE ASSESSEE FOR THE PURPOSE OF IT S WON BUSINESS. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE, S HRI MANOJ PHADNIS, C. A., MR. PRADEEP KUMAR MITRA, LD. SR. DR ON BEHALF OF THE REVENUE. WE HAVE ALSO DELIBERATED ON THE CASE LAWS CITED BY LD. AUTHORIZED REPRESENTATIVE AND LD. SENIOR D.R. DURING THE COURSE OF HEARING BEFORE US AND ALSO THE CASE LAWS -: 6: - 6 DISCUSSED BY THE LOWER AUTHORITIES IN THEIR RESPECT IVE ORDERS. FROM THE RECORD, WE FOUND THAT THE ASSESSEE HAS GIV EN ITS BUILDING ON LEASE TO ITS SISTER CONCERN. THE DIRECT ORS OF THE ASSESSEE COMPANY WERE PARTNERS IN THE SISTER CONCER N, TO WHOM BUILDING WAS GIVEN ON LEASE. FROM THE VERY SAM E PREMISES, BOTH THE ASSESSEE AND ITS SISTER CONCERN WERE CARRYING ON BUSINESS. AS PER THE TERMS OF LEASE AGR EEMENT, RENT WAS PAYABLE FROM 14 TH JUNE, 2005, HOWEVER, SINCE THE BUILDING WAS NOT COMPLETE AND POSSESSION OF THE BUI LDING ITSELF WAS GIVEN FROM 15 TH NOVEMBER, 2005, NO RENT WAS PAID BY SISTER CONCERN NOR ANY RENTAL OR OTHER INCOME ACCRU ED IN FAVOUR OF THE ASSESSEE PRIOR TO 15 TH NOVEMBER, 2005. WE HAD VERIFIED THE BUILDING CONSTRUCTION ACCOUNT AND ASSE SSEES CLAIM OF DEPRECIATION THEREON, WHICH CLEARLY INDICA TE THAT CONSTRUCTION OF THE BUILDING WAS IN PROGRESS DURING THE YEAR UNDER CONSIDERATION AND MOST OF THE DEPRECIATION CL AIMED BY THE ASSESSEE PERTAINS TO USE OF BUILDING FOR LESS T HAN 180 DAYS. NEITHER THE SISTER CONCERN HAS PAID ANY RENT FOR TH E PERIOD 14 TH JUNE, 2005, TO 15 TH NOVEMBER, 2005, NOR THE ASSESSEE HAS RECEIVED ANY RENT FOR THIS PERIOD. THE SISTER CONCE RN HAS -: 7: - 7 CLAIMED EXPENDITURE ON ACCOUNT OF RENT GIVEN TO THE ASSESSEE COMPANY ONLY FOR THE PERIOD FROM 15 TH NOVEMBER, 2005, TILL 31 ST MARCH, 2006. THUS, NEITHER ANY INCOME ACCRUED OR A ROSE TO ASSESSEE NOR ANY AMOUNT WAS RECEIVED BY THE ASSE SSEE FOR THE PERIOD FALLING BETWEEN 14 TH JUNE, 2005, TO 15 TH NOVEMBER, 2005. THEREFORE, NO INCOME CAN BE TAXED IN THE HAND S OF THE ASSESSEE FOR THIS PERIOD. MERELY A CLAUSE IN A LEAS E AGREEMENT, WHICH HAS NOT BEEN MATERIALIZED DUE TO CONSTRUCTION OF BUILDING NOT COMPLETED, CANNOT BE MADE A BASIS FOR ACCRUAL OF ANY RENTAL INCOME, WHICH WAS NEITHER RECEIVED NOR A CTUALLY ACCRUED IN FAVOUR OF THE ASSESSEE, SINCE THE POSSES SION OF THE BUILDING ITSELF WAS GIVEN ONLY W.E.F. 15 TH NOVEMBER, 2005. ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION IN TH E ORDER OF LOWER AUTHORITIES FOR TAXING THE RENTAL INCOME IN A SSESSEES HANDS W.E.F. 14 TH JUNE, 2005, MERELY ON THE BASIS OF CLAUSE IN THE LEASE AGREEMENT, WHICH WAS NOT MATERIALIZED. TH E DOCUMENTS PLACED ON RECORD REGARDING PROGRESS IN BU ILDING CONSTRUCTION AND THE DEPRECIATION CLAIMED THEREON B Y THE ASSESSEE AND ITS ACTUAL POSSESSION GIVEN FROM 15 TH NOVEMBER, 2005, CLEARLY INDICATE THAT RENTAL INCOME ACCRUED I N THE HANDS -: 8: - 8 OF THE ASSESSEE ONLY WHEN POSSESSION WAS GIVEN BY T HE ASSESSEE I.E. W.E.F. 15 TH NOVEMBER, 2005. WE, THEREFORE, DIRECT THE AO TO BRING TO TAX NET THE RENTAL INCOME ACCRUE D IN FAVOUR OF ASSESSEE AFTER GIVING POSSESSION OF BUILDING FOR COMMON SHARING I.E. W.E.F. 15 TH NOVEMBER, 2005, TILL 31 ST MARCH, 2006. STATUTORY DEDUCTIONS ALLOWABLE U/S 24 OF INCOME-TAX ACT, 1961, IN RESPECT OF RENTAL INCOME IS ALSO DIRECTED TO BE ALLOWED AS PER LAW. 5. NEXT GRIEVANCE OF THE ASSESSEE RELATES TO THE INCOM E OFFERED BY IT UNDER THE HEAD BUSINESS IN RESPECT OF SHARING OF BUILDING ALLOWED TO THE SISTER CONCERN. CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT AS PER PROVISION S OF SECTION 22 WHERE A BUILDING IS OCCUPIED BY THE ASSE SSEE FOR THE PURPOSE OF ANY BUSINESS CARRIED ON BY HIM, THE PROFIT OF WHICH ARE CHARGEABLE TO INCOME TAX U/S 28 OF INCOME -TAX ACT, 1961, THE VALUE OF SUCH PROPERTY SHALL NOT BE CHARG EABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. FURTHERMORE, THE BUILDING WAS GIVING ON COMMON SHARING BASIS, THEREF ORE, SHARING OF COMMON EXPENSES BY THE SISTER CONCERN WI LL NOT AMOUNT TO INCOME IN THE HANDS OF ASSESSEE UNDER THE HEAD OF -: 9: - 9 INCOME FROM HOUSE PROPERTY. THE ASSESSEE HAS OFFE RED THE INCOME RECEIVED FROM SISTER CONCERN IN RESPECT OF A LLOWING USE OF BUILDING TO IT UNDER THE HEAD BUSINESS RECEIPTS . AS PER LD. AUTHORIZED REPRESENTATIVE, THE QUESTION WHETHER A P ARTICULAR INCOME IS INCOME FROM BUSINESS OR HOUSE PROPERTY IS TO BE DECIDED ACCORDING TO THE PARTICULAR CIRCUMSTANCES A ND THE CONDUCT OF THE PARTIES CONCERNED. IT IS PRE-DOMINAN TLY A MATTER OF INTENTION AND INTENTION IS AN INFERENCE TO BE DR AWN FROM THE RELEVANT FACTS. LD. AUTHORIZED REPRESENTATIVE FURTH ER CONTENDED THAT THE AO HAS FAILED TO APPRECIATE THAT THE LEASING OUT OF A PREMISES TO SISTER CONCERN WAS ONLY TO SHA RE THE COMMON INFRASTRUCTURE OF THE COMPANY, THEREFORE, TH E INCOME ARISING OUT OF SUCH LETTING OUT IS TAXABLE UNDER TH E HEAD INCOME FROM BUSINESS OR AS AN ALTERNATIVE UNDER T HE HEAD INCOME FROM OTHER SOURCES, BUT NOT CERTAINLY UNDE R THE HEAD INCOME FROM HOUSE PROPERTY. 6. ON THE OTHER HAND, THE CONTENTION OF THE LD. SENIOR D.R. WAS THAT THE ASSESSEE HAS GIVEN ITS BUILDING T O THE SISTER CONCERN, THE INCOME OF WHICH ACCRUED FROM IMMOVABLE -: 10: - 10 PROPERTY IS LIABLE TO BE TAXED UNDER THE HEAD INCO ME FROM HOUSE PROPERTY AND NOT AS BUSINESS INCOME . 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS ALLOWED C OMMON USE OF ITS BUILDING TO ITS SISTER CONCERN. EVEN THOUGH BOTH THE ASSESSEE AND SISTER CONCERN WERE USING THE BUILDING FOR THEIR BUSINESS PURPOSES, BUT THE INCOME ACCRUED IN THE HA NDS OF THE ASSESSEE IS WITH RESPECT TO ALLOWING COMMON SHA RING OF IMMOVABLE PROPERTY OWNED BY IT, THE SAME IS, THEREF ORE, LIABLE TO BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPE RTY. THE ISSUE IS SETTLED BY THE DECISION OF THE KOLKATA HIG H COURT IN THE CASE OF SHAMBU INVESTMENT PRIVATE LIMITED, 249 ITR 47, WHICH WAS SUBSEQUENTLY AFFIRMED BY HON'BLE SUPREME COURT, WHEREIN IT WAS HELD THAT LETTING OUT OF FURNISHED P REMISES ON MONTHLY RENT BASIS AMOUNTS TO INCOME FROM HOUSE PRO PERTY AND NOT AS BUSINESS INCOME. IN THE INSTANT CASE, UN DISPUTEDLY THE ASSESSEE HAS ALLOWED COMMON ENJOYMENT OF IMMOVA BLE PROPERTY WITH INFRASTRUCTURE AND OTHER FACILITIES T O ITS SISTER CONCERN, THEREFORE, THE AMOUNT ACCRUED IN FAVOUR OF ASSESSEE ON ACCOUNT OF LEASE RENT IS LIABLE TO BE TAXED AS I NCOME FROM -: 11: - 11 HOUSE PROPERTY AND NOT AS BUSINESS INCOME. WE ARE, THEREFORE, INCLINED TO AGREE WITH THE LD. SENIOR D.R. THAT THE LOWER AUTHORITIES WERE CORRECT IN TAXING THE AMOUNT RECEI VED AS INCOME FROM HOUSE PROPERTY IN PLACE OF TREATING T HE SAME AS BUSINESS INCOME. 8. LAST GRIEVANCE RELATES TO DISALLOWING CLAIM OF DEPRECIATION ON THE BUILDING. 9. WHILE TREATING THE INCOME RECEIVED FROM PROPERTY AS RENTAL INCOME, THE AO HAS ALSO DECLINED THE ASSESSE ES CLAIM FOR DEPRECIATION. FROM THE RECORD, WE FOUND THAT TH E ASSESSEE IS OWNER OF THE BUILDING AND USING THE SAME FOR THE PURPOSES OF ITS BUSINESS. ASSESSEE HAD ALSO ALLOWED COMMON U SE OF THE PREMISES TO ITS SISTER CONCERN FOR THEIR BUSINESS A CTIVITIES. THE ASSESSEE COMPANY WAS ALSO DOING BUSINESS FROM THE V ERY SAME PREMISES, WHICH IS CLEARLY EVIDENT FROM THE AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET ALONGWITH THE AUDITO RS REPORT FILED BEFORE THE AO. WE ALSO FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS UNDERTAKEN BUSINESS AT THIS PREMISES AND ACHIEVED SALES TURNOVER OF RS. 74.38 LAKHS. IT IS NOT THE CASE OF THE AO THAT AFTER ALLO WING COMMON -: 12: - 12 POSSESSION OF THE BUILDING TO THE SISTER CONCERN, T HE ASSESSEE HAS NOT CARRIED ON ITS BUSINESS FORM THERE OR SHIFT ED ITS BUSINESS TO ANY OTHER PLACE. THUS, WE FOUND AS PER MATERIAL PLACED ON RECORD THAT BOTH THE ASSESSEE AND ITS SIS TER CONCERN WERE CARRYING ON THEIR BUSINESS ACTIVITIES FROM THE VERY SAME PLACE. AS PER THE PROVISIONS OF SECTION 32(1), FOR CLAIMING DEPRECIATION ON THE BUILDING, THE ASSESSEE MUST NOT ONLY BE OWNER OF BUILDING BUT THE BUILDING SHOULD ALSO BE U SED BY IT FOR THE PURPOSE OF ITS BUSINESS. MERELY OWNERSHIP I S NOT SUFFICIENT FOR ALLOWING ITS CLAIM OF DEPRECIATION T HEREON, AT THE VERY SAME TIME, THE ASSESSEE IS REQUIRED TO SHOW TH AT BUILDING WAS EXCLUSIVELY USED FOR THE PURPOSE OF ITS BUSINES S. HOWEVER, WHERE A PART OF THE BUILDING IS USED BY ANY CONCERN OTHER THAN THE ASSESSEE, NO CLAIM OF DEPRECIATION CAN BE ALLOW ED WITH RESPECT TO THAT PORTION OF BUILDING, WHICH IS USED BY OTHER CONCERN. AT THE VERY SAME TIME, THE ASSESSEE CANNOT BE DECLINED ITS CLAIM OF DEPRECIATION ON THE BUILDING WHICH IS NOT ONLY OWNED BY IT BUT ALSO USED BY IT FOR ITS OWN BU SINESS. FURTHERMORE, MERELY TAXING THE INCOME RECEIVED FOR COMMON USE OF BUILDING BY SISTER CONCERN UNDER THE HEAD I NCOME FROM -: 13: - 13 HOUSE PROPERTY, WILL NOT DISENTITLE THE ASSESSEE F OR ITS CLAIM OF DEPRECIATION ON THE BUILDING OWNED BY HIM AND USED BY HIM FOR ITS OWN BUSINESS PURPOSES. ON THE FINDING THAT SISTER CONCERN OF THE ASSESSEE WAS ALSO EQUALLY USING THE COMMON INFRASTRUCTURE, THE ASSESSEE CANNOT BE ALLOWED ITS CLAIM OF FULL DEPRECIATION. 10. UNDER THE PROVISIONS OF SECTION 38(2), WHERE ANY BUILDING MACHINERY OR PLANT ETC. HAVE NOT BEEN EXCL USIVELY USED FOR THE PURPOSE OF BUSINESS, THE DEDUCTION UND ER SUB SECTION (1) OF SECTION 32 SHALL BE RESTRICTED TO TH E FAIR PROPORTIONATE PART THEREOF HAVING REGARD TO THE USE R OF SUCH BUILDING. ON A FAIR AND REASONABLE BASIS, WE FOUND THAT THE ASSESSEE AND ITS SISTER CONCERN WAS EQUALLY SHARING BUILDING PREMISES FOR CARRYING ON THEIR BUSINESS ACTIVITIES. THEREFORE, THE ASSESSEE IS ENTITLED ONLY FOR 50 % OF ITS DEPRE CIATION CLAIM. MERELY BECAUSE INCOME FROM SUCH LETTING OF BUILDING , COMMON USE OF WHICH IS BEING ALLOWED TO THE SISTER CONCERN FOR ITS BUSINESS, IS TAXABLE UNDER THE HEAD OF INCOME FROM HOUSE PROPERTY, ASSESSEES CLAIM FOR DEPRECIATION ON THE BUILDING, OWNED BY IT AND WHICH IS EQUALLY USED BY ASSESSEE F OR THE -: 14: - 14 PURPOSE OF ITS BUSINESS CANNOT BE DECLINED IN ENTIR ETY. WE HAVE TO SEE THE USE OF BUILDING BY THE ASSESSEE FOR ITS OWN BUSINESS PURPOSES VIS--VIS THE USE OF THE BUILDING BY THE SISTER CONCERN. SINCE BOTH THE ASSESSEE AND SISTER CONCERN WERE USING THE SAME PREMISES AND SHARING THE COMMON FACILITIES THEREIN, THE ASSESSEE IS ENTITLED ONLY F OR DEPRECIATION OF 50 % AS CLAIMED BY IT. 11. ACCORDINGLY, WE DIRECT THE AO TO ALLOW 50 % OF THE DEPRECIATION AS CLAIMED BY THE ASSESSEE. WE DIRECT ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2011. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :16 TH JUNE, 2011. CPU* 8106 -: 15: - 15