Ajanta Network, Bangaluru V. Income-Tax officer, Ward-2(2)(4), Bengaluru

ITA 2626/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5455 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 06-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2626 / BANG/201 7 ASSESSMENT YEAR : 201 2 - 13 M/S. AJANTA NETWORK, NO. 105/A, 3 RD CROSS, 2 ND STAGE, INDUSTRIAL SUBURB, YESHWANTHPUR, BANGALORE 560 022. PAN: AAPFA5696M VS. THE INCOME TAX OFFICER, WARD 2 (2) (4), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 1 9 . 0 3 .2018 DATE OF PRONOUNCEMENT : 1 9 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-7, BANGALOREDATED 06.10.2017 FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL A S ON FACTS IN MAKING DISALLOWANCE OF RS. 22,48,889/- OUT OF DEPRE CIATION ON BUILDING AND THE LEARNED CIT(A) HAS ERRED IN CONFIR MING THE SAME. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DE LETE OR WITHDRAW ONE OR MORE GROUNDS OF APPEAL. 3. THE APPEAL WAS FIRST FIXED FOR HEARING ON 22.02. 2018 AND ON THAT DATE, THE LD. AR OF ASSESSEE REQUESTED FOR ADJOURNMENT AND ON HIS REQUEST, THE HEARING WAS ADJOURNED TO 19.03.2018. THE DATE OF HEARING WAS P RONOUNCED IN THE OPEN COURT AND NOTICE OF HEARING WAS ALSO SENT TO ASSESS EE BY RPAD BECAUSE ON THAT DATE, NONE HAD APPEARED ON BEHALF OF THE ASSES SEE. IN SPITE OF THIS, NONE APPEARED ON THIS DATE ALSO I.E. 19.03.2018 AND THER EFORE, THE APPEAL WAS HEARD EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE S UPPORTED THE ORDERS OF AUTHORITIES BELOW. ITA NO. 2626/BANG/2017 PAGE 2 OF 3 4. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR OF R EVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT ONLY ONE ISSUE IS INVOLVED REGARDING DISALLOWANCE OF RS. 22,48,889/- OUT OF DEPRECIATION ON BUILDING. THIS ISSUE WAS DECIDED BY CIT(A) IN PARA 6 OF HIS ORDER WHICH IS R EPRODUCED HEREINBELOW. 6. THE SUBMISSION OF THE APPELLANT HAS BEEN CONSIDE RED. DEPRECIATION IS ALLOWABLE IN RESPECT OF BUILDING, M ACHINERY, PLANT OR FURNITURE OWNED BY THE ASSESSEE AND USED FOR THE PU RPOSE OF THE BUSINESS OR PROFESSION IN TERMS OF SECTION 32 OF TH E INCOME-TAX ACT, 1961 DEPRECIATION IS ALLOWABLE AS A DEDUCTION BOTH ACCORDING TO ACCOUNTANCY PRINCIPLES AND ACCORDING TO THE ACT, BE CAUSE OTHERWISE ONE WOULD NOT HAVE A TRUE PICTURE OF THE REAL INCOM E OF THE BUSINESS. BUT LAND DOES NOT DEPRECIATE, AND IF DEPRECIATION W AS ALLOWED IT WOULD GIVE A WRONG PICTURE OF THE TRUE INCOME. THEREFORE , THERE IS NO RATE OF DEPRECIATION PRESCRIBED FOR LAND. THEREFORE, THE C LAIM OF DEPRECIATION ON LAND BY THE APPELLANT AND THE ARGUMENT THAT THE COST OF LAND IS AN INTEGRAL PART OF THE BUILDING AND CANNOT BE SEPARAT ED FOR THE PURPOSE OF CLAIMING DEPRECIATION IS NOT CORRECT. THE SUPREM E COURT OF INDIA IN THE CASE OF ALPS THEATRE 65 ITR 377 HAS HELD THAT C OST OF LAND IS NOT ENTITLED TO DEPRECIATION ALONG WITH COST OF BUILDIN G STANDING THEREON. THE ITAT DELHI IN CASE OF CAPITAL CARS PVT LTD 114 ITD 286 HAS ALSO DECIDED IN SIMILAR LINE. THE ASSESSEE ITSELF BEFORE THE AO HAS SUBMITTED THE VALUATION OF THE GODOWN AND GUEST HOU SE BUILDINGS. UNDER SUCH CIRCUMSTANCES, THE ASSESSEE IS BOUND BY THE WORKING OF THE VALUE OF THE LAND AND THE SUPER STRUCTURE SUBMITTED BY ITSELF. IN VIEW OF ABOVE, THE DECISION OF THE AO IS FOUND TO BE CORREC T. 5. I FIND THAT THE LD. CIT(A) HAS FOLLOWED THE JUDG MENT OF HONBLE APEX COURT RENDERED IN THE CASE OF ALPS THEATRE (SUPRA) AND TH ETRIBUNAL ORDER RENDERED BY DELHI BENCH IN THE CASE OF CAPITAL CARS PVT. LTD. ( SUPRA) AND THEREFORE IN MY CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE OR DER OF CIT(A). HENCE I CONFIRM THE SAME. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 19 TH MARCH, 2018. /MS/ ITA NO. 2626/BANG/2017 PAGE 3 OF 3 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.