ACIT CIRCLE-16(1), Mumbai V. M/S FARAH KHAN, Mumbai

ITA 4428/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8767 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 27-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR SHANTESHWAR SWAMI LD
• Assessee Lawyers: CHETAN KARIA LD
• Keywords: Depreciation; Business expenditure; Rule of consistency; Additional evidence; Capital expenditure
• Section: 143(3); 37(1); 201; 208; 13; 22; 32; 145; 11

Judgement Text

ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , , BEFORE JUSTICE SHRI P . P . BHATT, PRESIDENT AND SHRI MANOJ KUMAR AGGA RWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 4428 /MUM/ 2019 ( / ASSESSMENT YEAR: 2013 - 14 ) ACIT - CIRCLE - 16(1), R. NO. 439, 4 TH FLOOR AAYAKAR BHAVAN, M. K. ROAD MUMBAI - 400 020 / VS. MS. FARAH KHAN A - 3501/3601 O BEROI SKY HEIGHTS LOKHANDWALA COMPLEX ANDHERI WEST, MUMBAI - 400 053 ./ ./ PAN/GIR NO. A A DPK - 0664 - P ( / APPELLANT ) : ( / RESPONDENT ) REVENUE BY : DR. SHANTESHWAR SWAMI, LD. DR ASSESSEE BY : SHRI CHETAN KARIA, LD. AR / DATE OF HEARING : 29 /06 /2021 / DATE OF PRONOUNCEMENT : 29/07/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR (AY) 201 3 - 14 ARISES OUT OF THE ORDER OF LEARNED COMMIS SIONER OF INCOME - TAX (APPEALS) - 4 , MUMBAI [CIT(A)], DATED 12/04 /20 19 IN THE MATTER OF ASSESSMENT FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) ON 29/03/2016 . T H E GROUNDS RAISED BY THE REVENUE READ AS UNDER: - (I) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DISALLOWANCE OF EXPENSES TO THE TUNE ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 2 OF RS.1,55,74,455/ - RELATING TO RESIDENTIAL PREMISES, WITHOUT CONSIDERING THE FACT THAT THE SAID PREMISES WAS NOT UTILIZED BY THE ASSESSEE FOR CARRYING OUT HER PROFESSIONAL ACTIVITIES . (II) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DISALLOWANCE OF EXPENSES TO THE TUNE OF RS.1,55,74,455/ - RELATING TO RESIDENTIAL PR EMISES, IGNORING THE FACT THAT THE WARD INSPECTOR WHO INSPECTED THE PREMISES HAD CATEGORICALLY REPORTED THAT THE SAID PREMISES WAS UTILIZED ONLY FOR RESIDENTIAL PURPOSE. (III) THE APPELLANT PRAYS THAT THE ORDER OF LD.CIT(A) ON THE ABOVE GROUNDS BE SET - ASID E AND THAT OF THE ASSESSING OFFICER BE RESTORED. AS EVIDENT, THE REVENUE IS AGGRIEVED BY DELETION OF DISALLOWANCE OF RS.155.74 LACS AS MADE BY LD. AO IN ASSESSMENT ORDER DATED 29/03/2016. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AND PERUSED RELEV ANT MATERIAL ON RECORD. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT AS FRAMED BY LD. A O WHILE LD. AR SUPPORTED THE ORDER OF LEARNED FIRST APPELLATE AUTHORITY . FOR THIS , LD. AR DREW OUR ATTENTION TO THE DOCUMENT ARY E VIDENCES AS WELL AS PHOTOGRAPHS / AU DIO - VISUAL CLIPS AS PLACED ON RECORD. T HE AUDIO - VISU AL CLIP S WERE DISPLAYED B EFORE US AND THE SAME WERE DU LY APPRECIATED. T HE LD. AR ALSO RAISED A PLEA THAT SIMILAR EXPENSES WERE ALLOWED BY REVENUE IN EARLIER YEARS AND THEREFORE, DISALLOWING THE SAME IN TH IS YEAR WOULD VIOLATE THE RULE OF CONSISTENCY. AFTER DUE CONSIDERATION OF MATERIAL F ACTS, O UR ADJUDICATION TO THE APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. ASSESSMENT PROCEEDINGS 3.1 THE MATERI AL FACTS ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDU AL IS STATED TO BE ENGAGED AS FILM DIRECTOR AS WELL AS PROFESSIONAL CHOREOGRAPHER. T HE RETURN OF INCOME WAS FILED FOR THE YEAR UNDER CONSIDERATION DECLARING INCOME OF RS.99.19 LACS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT TRANSPIRED THAT THE ASSESS EE OWN ED 6 FLATS / UNITS (A3 501 A, A3501B, A3501C, A3601A, A3601B & A3601C) ON 35 TH & ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 3 36 TH FLOOR OF A BUILDING NAMELY OBEROI SKY HEIGHTS SITUATED AT LOKHANDWALA COMPLEX, ANDHERI (WEST), MUMBAI. ALL THE UNITS WERE STATED TO BE USED AS OFFICE - CUM - RESIDENCE FO R THE ASSESSEE. IT WAS SUBMITTED THAT A SPECIFIED PART THEREOF WAS USED BY HER AS OF FICE AND REMAINING PART WAS USED FOR THE PURPOSE OF RESIDENCE. FOR THE SPECIFIED PART WHICH WAS BEING USED AS OFFICE, THE ASSESSEE CLAIMED DEDUCTION OF EXPENDITURE AS PER F OLLOWING DETAILS: - NO. PARTICULARS AMT. (RS.) 1. INTEREST ON OFFICE LOAN 51.5 2 LA CS 2. DEPRECIATION ON OFFICE AT OBEROI HEIGHTS 60.91 LACS 3. DEPRECIATION ON FURNITURE & FIXTURES AT OBEROI HEIGHTS 23. 80 LACS 4. SOCIETY CHARGES (50%) 17.15 LACS 5. EL ECTRICITY CHARGES (50%) 2.3 6 LACS TOTAL 155.74 LACS T HE INTEREST ON LOAN BORROWED BY AS SESSEE TO ACQUIRE OFFICE PREM ISES WAS C L AIMED AS DEDUCTION U /S 36(1) (III), CL AI M OF DEPRECATION WAS MADE U/S 32 WHE REAS SOCIETY CHARGES AND ELECTRICITY CHAR GES WER E CLAIMED U/S 37(1) OF TH E ACT. THE SE E XPENSES WERE CLAI MED ON THE PLEA THAT HALF OF THE PREMISES WAS USED AS ASSESSEE S OFFICES W HEREA S REMAINING HALF WAS BEING USED AS R ESIDENCE. THE ARE A OF OFFICE AND RESIDENCE WAS STATED TO BE C LEARLY DEMARCATED AND HA VING OFFIC E NEXT DOOR TO ASSESSEE S RESIDENCE, WOULD PROVIDE HER COMFORT O F NOT HAVING TO BE IN PUBLIC SPACE S E XCEPT WHERE NECESSARY. 3.2 THE LD. AO CALLED FOR DETAILS OF ABOVE EXPENDITURE IN A SPECIFIED FORMAT . HOWEVER, IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION FORTHCOMING FROM THE ASSESSEE, THE EXPENDITURE SO CLAIMED WAS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE . THE LD. AO ALSO NOTED THAT TH E ASSESSEE WAS CLAIMING DEPRECIATION ON ANOTHER OFFICE ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 4 SPACE SITUATED AT EMBASSY TOWER. FINALLY, IT WAS CONCLUDED BY LD. AO THAT THE ASSESSEE COULD NEITHER PRODUCE DOCUME NTARY EVIDENCES NOR PROVIDE ANY JUSTIFICATION TO SUBSTANTIATE HER CLAIM THAT THE PREMI SES WAS BEING USED AS HER OFFICE AND THE EXPENDITURE WAS ALLOWABLE AS BUSINESS EXPENDITURE. THER EFORE, THE AFORESAID EXPENDITURE OF RS.155.74 LACS WAS DISALLOWED WHILE COMPUTING THE INCOME. APPELLATE PROCEEDINGS 4.1 DURING APPELLATE PROCEEDINGS, THE ASSESSEE PRODUCED ADDITIONAL EVIDENCES TO SUBSTANTIATE HER CLAIM THAT PART OF THE PREMISE S WAS BEING U SE D AS HER OFFICE. ACCORDINGLY, A REMAND REPORT WAS SOUGHT FROM LD.AO . IN THE REMAND REPORT, IT WAS R EITERATED THAT THE ASSESSEE DID NOT FURNISH THE INFORMATION IN THE SUGG ESTED FORM AT AND THEREFORE, THE EXPENSES THUS CLAIMED BY HER COULD NOT BE ALLOWED. T HE LD. AO ALSO OPPOSED ADMISSION OF ADDITIONAL EVIDENCES. 4.2 HOWEVER, THE ASSESSEE CONTROVERTED THE FINDINGS OF LD. AO ON THE GROUND THAT NECESSARY DETAILS / INFORMATION AS CALLED WERE FURNISHED DURING ASSESSMENT PROCEEDINGS AND IT WAS WELL DEMONSTRATED TH AT PART OF THE PREMISES AT OBEROI SKY HEIGHTS WAS BEING USED FOR THE PURPOSE OF PROFESSION. IT WAS ALSO EXPLAINED THAT THE ASSESSEE WAS PROFESSIONAL CHOREOGRAPHER AND SHE COULD NOT PERFORM / CARRY OUT PROFESSIONAL ACTIVITIES WITHOUT ANY OFFICE PREMISES. TH E PROFESSION OF CHOREOGRAPHER WOULD REQUIRE CONTINUOUS INNOVATION A ND PRACTICE WHICH, IN TURN , WOULD REQUIRE SUFFICIENT SPACE AND INFRASTRUCTURE . IT WAS ALSO SUBMITTED TH AT THERE WERE NO OTHER OFFICE PREMISES BEING USED BY THE ASSESSEE FOR THE SAME . THE AT TENTION WAS DRAWN TO THE FACT THAT THE 6 UNITS WERE ACQUIRED IN AY 2012 - 13 , THE ASSESSMENT OF WHICH WAS ALSO FRAMED IN SCRUTINY ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 5 ASSESSMENT U/S 143(3). DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THAT YEAR, NECESSARY DETAILS WITH RESPECT TO ACQUISITIO N OF UNITS WERE FURNISHED ALONG WITH DOCUMENTS. THE ASSESSEE HAD ALSO DEMONSTRATED THE UTILIZATION OF 2 UNITS VIZ. 3501B & 3601B FOR THE ASSESSEES PROFESSION. THESE FACTS AS WELL AS EVIDENCES WERE ACCEPTED BY LD. AO AND SIMILAR EXPENDITURE INCLUDING DEPRE CI ATION CLAIMED IN THAT YEAR WAS DULY ALLOWED TO THE ASSESSEE AFTER DUE VERIFICATION. THEREFORE, LD. AO WAS NOT JUSTIFIED IN TAKING CONTRARY VIEW IN THIS YEAR. IN FACT, IN THE REMAND REPORT, LD. AO HAD OBSERVED THAT THE ASSESSEE WAS ELIGIBLE O NLY FOR 10% O F TOTAL EXPENSES ON THE PRESUMPTION THAT ONLY UNIT NO. 3501B WAS USED FOR THE PURPOSE OF OFFICE WHOSE AREA WAS 10% OF TOTAL AREA OF SIX U NITS. THE O BSERVATION WAS NOT CORRE CT SINCE THE ASSESSEE WAS USING TWO UNITS FOR THE PURPOSE OF PROFESSION WHOSE AREA W AS APPROX. 47% OF TOTAL AR EA . IT WAS FURTHER EXPLAINED THAT UP - TO FINANCIAL YEAR 2011 - 12, THE ASSESSEE WAS CARRYING ON HER PROFESSION FROM OFFICE PREMISES SITUATED A T EMBA SSY TOWER (UNIT NO.1101) AND ALSO HAD RESIDEN CE IN EMBASSY TOWER ( UNIT NO. 1001). THE SE UNITS WERE USED AS OFFICE - CUM - RESIDENCE AND THE EXPENSES AND DEPRECIATION CLAIMED ON OFFICE UNIT WAS ALLOWED BY LD.AO IN ALL THE EARLIER YEARS WITHOUT ANY DISPUTE. S INCE THE ASSESSEE WAS RENO WNED CHOREOGRAPHER AND FILM DIRECTOR IN HINDI FILM INDUSTRY, D UR ING 2011 , SHE SHIFTED TO A NEW DUPLEX APARTMENT SO AS TO MEET THE EXPANDING PROFESSIONAL ASSIGNMENTS AS WELL AS TO MEET THE NEED FOR BIGGER HOUSE AS SHE WAS RAISING HER T HREE K IDS (TRIPLETS). THEREFORE, THE ASSESSEE ACQUIRED SIX FLATS / UNITS IN A BUILDI NG CALLED OBEROI SKY HEIGHTS . THE UNITS WERE SPREAD OVER 2 FLOORS. IN THE NEW HOUSE THE ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 6 ASSESSEE KEPT UNIT NOS. 3501B & 3601B E XCLUSIVELY FOR OFFICE / PROFESSIONAL PURPOSE WH EREAS THE REMAINING UNITS WERE USED FOR RESIDENTIAL PURPOSES . THE SE TWO UNITS WERE P URCHASED FOR TOTAL CONSIDERATION OF RS.539.83 LACS INCLUDING PROPORTIONATE STAMP DUTY AND REGISTRATION CHARGES. THE ASSESSEE HAD FURNISHED COMPLETE DETAILS OF ACQUISIT ION OF UNITS DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS FOR AY 2012 - 13 AND D E MONSTRATED THE UTILIZATION OF THESE TWO UNITS FOR THE PURPOSE OF PROFESSION. THE LD. AO , AFTER DUE VERIFICATION / DETAILS OF UNITS , BIFURCATED THE UNITS INTO RESIDENTIAL USE AND OFFICE USE AND ALLOWED DEPRECIATION AS CLAIMED IN THE RETURN OF INCOME WITH R E SPECT TO UNIT NOS. 3501B & 3601B. THE LD. AO ALSO ALLOWED PROPORTIONATE ELECTRICITY EXPENSES & SOCIETY CHARGES WITH RESPECT TO THESE TWO UNITS. THE PROPORTIONATE INTERE ST ON LOAN TAKEN TO ACQUIRE THE SE UNITS WAS ALSO ALLOWED. FINALLY, ENTIRE EXPENDITURE A S CLAIMED IN AY 2012 - 13 AGAINST TWO UNITS WAS ALLOWED. THEREFORE, FACTS BEING THE SAME IN THIS YEAR, THE CLAIM WAS TO BE SIMILARLY ALLOWED. THE ASSESSE E ALSO CO NTROVERT ED THE ALLEGATION OF NON - FURNISHING OF DETAILS IN THE SPECIFIED FORMAT BY SUBMITTING T H AT DETAILS / INFORMATION SUBMITTED BEFORE L D. A O WOULD COVER THE NATURE OF DETAILS AND INFORMATION SOUGHT BY LD.AO AND THEREFORE , THE DISALLOWANCE WAS NOT JUSTIFIED. THE ASSESSEE ALSO DRE W ATTENTION TO THE FACT THAT THE INTERIOR OF THE TWO UNITS WAS DESIGN ED IN SUCH A WAY THAT THESE UNITS WOULD BE USED EXCLUSIVELY FOR THE PURPOSE OF B USINESS. IN SUPPORT OF CLAIM, THE ASSESSEE ALSO FURNISHED SERVICE TAX REGISTRATION CERTIF ICATE, COPIES OF COMMERCIAL CONTRACT S ENTERED INTO WITH CLIENTS, PROFESSIONAL FEES / S ALES INVOICES RAISED BY THE ASSESSEE ON THIRD PARTIES ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 7 ETC. ALL THESE DOCUMENTS MENTIONED ASSESSEES ADDRESS AS UNIT NO. 3501 & 3601. 5. THE LD. CIT(A) AFTER DUE CONSID ERATION OF REMAND REPORT AS WELL AS ASSESSEES SUBMISSIONS NOTED THAT TH E ASSESSEE WAS A WELL - KNOWN CHOREOGRAPHER AND EARNING SIGNIFICANT I NCOME F ROM PROFESSIONAL ACTIVITIES. THE EARNING OF SUCH HUGE PROFESSIONAL INCOME WOULD NOT BE POSSIBLE WITHOUT ANY SP ECIFIED B USINESS PLACE. THE LD. AO , IN EARLIER ASSESSMENT YEAR HAD VERIFIED THE DETAIL S AND ALLOWED DEDUCTION OF DEPRECIATION AND OTHER EXPENSES IN SCRUTINY ASSESSMENT U/S 143(3). FURTHER, IN THIS YEAR, THE ASSESSEE HAD FURNISHED MANY DOCUMENTARY EVIDENCES LIKE COPY OF SERVICE TAX REGISTRATION ALONG WITH COPIES OF COMMERCIAL CONTRACTS AND I NVOICES WHICH BEAR THE ADDRESS OF THE ASSESSEE. THE ASSESSEE ALSO FURNISHED THE PHOTOGRAPHS OF OFFICE SET - UP. FINALLY, IN TERMS OF DECISION OF THIS TRIBUNAL IN ACIT V/S M /S KRYSTAL COLLOIDS PRIVATE LTD. (ITA NO.3170/MUM/2016 DATED 31/07/208), LD. CIT(A) AL LOWED THE CLAIM OF THE ASSESSEE AND HELD THAT THE EXPENSES WOULD BE ALLOWABLE EXPENDITURE. THIS DECISION OF MUMBAI TRIBUNAL HAS HELD THAT ONCE AN AS SET IS PART OF THE BLO CK OF ASSETS AND DEPRECIATION IS GRANTED ON THAT BLOCK, IT CANNOT BE DENIED IN SUBSEQU ENT YEAR ON THE GROUND THAT ONE OF THE ASSETS IS NOT USED BY THE ASSESSEE IN SOME OF THE YEARS. THE CONCEPT USER OF ASSETS HAS TO APPLY UPON BLOCK AS A WHOLE INSTEAD OF AN INDIVIDUAL ASSET. THE SAID DECISION, IN TURN, PLACED RELIANCE ON THE DECISION IN U NITEX PRODUCTS LTD. V/S ITO (2008; 22 SOT 430 (MUM.), CIT V. BHARAT ALUMINUM CO. LTD. (2010 ; 187 TAXMAN 111 (DELHI), CIT V. OSWAL AGRO MILLS LTD. (2011) 197 TAXMAN 25 (DE LHI), SWATI SYNTHETICS LTD. V. ITO (2010) 38 SOT 208 (MUM). THIS DECISION ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 8 HAS ALSO CON SIDERED THE RATIO OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. WESTERN OUTDOOR INTERACTIVE PVT. LTD. (2012) 349 ITR 309 (BOM) WHEREIN IT WAS HELD THAT W HEN THE BENEFIT / DEDUCTION IS AVAILABLE FOR A PARTICULAR NUMBER OF YEARS ON SATISFACT ION OF CERTAIN CONDITIONS AND UNDER THE PROVISIONS OF THE ACT, THEN WITHOUT WITHDRAWING OR SETTING ASIDE THE RELIEF GRANTED FOR THE FIRST AY IN WHICH CLAIM WAS MADE AND A CCEPTED, THE AO CANNOT WITHDRAW THE RELIEF FOR SUBSEQUENT ASSESSMENT YEARS. SIMILAR WA S THE RATIO IN CIT V. ARTS & CRAFTS EXPORTS (2012) 246 CTR 463 (BOM) ; CIT V. PAUL BROTHERS (1995) 216 ITR 548 (BOM), DIRECT INFORMATION (P) LTD. V. ITO (2011) 203 TAXMAN 70 (BOM) WHICH HAD TAKEN THE SAME VIEW. FINALLY, THE IMPU GNED ADDITIONS / DISALLOWANCE S WERE DELETED. AGGRIEVED AS AFORESAID THE REVENUE IS IN FURT HER APPEAL BEFORE US. OUR FINDINGS AND ADJUDICATION 6. AS IS EVIDENT FROM RECORD, THE ASSESSEE IS A CREATIVE ARTIST. THE ASSESSEE WAS ENGAGED AS CHOREOGRAPHER AND FILM PR ODUCER. FOR THE SAID PUR POSE, THE ASSESSEE WOULD REQUIRE CREATIVE SPACE FROM WHERE SHE COULD CARRY OUT PROFESSIONAL ENGAGEMENTS. IT COULD BE APPRECIATED THAT AS A CHOREOGRA P HER AND A FILM PROD U CER , THE ASSESSEE WOULD NEED WORK SPA CE TO PRAC TICE DANCE MOVES AND ALSO FOR STORY SESS IONS AND OTHER MEETINGS. IN THIS Y EAR, EXCEPT FOR THIS SPACE, SHE HAS NOT CLAIMED ANY OTHER OFFI CE SET - UP. ANOTHER FACT BORNE OUT OF THE RECORD IS THAT TILL 2011, THE ASSESSEE WAS HAVING SIMILAR UNITS AT EMBASSY TOWER WHICH WERE BEI NG USED AS OFFICE - CUM - RE SIDENCE , IN THE SAME MANNER . THE PROPORTIONATE EXPENSES RELATING TO OFFICE IN ALL THE EA RLIER YEARS WERE ALLOWED TO THE ASSESSEE. TO MEET EXPANDING PROFESSIONAL DEMANDS AND ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 9 TO MEET THE NEED FOR BIGGER HOUSE, THE ASSESSEE MOVED TO NEW DUPLEX APARTMENT. THE SAID PREMISES WERE STATED TO BE SIMILARLY USED BY THE ASSESSEE FOR OFFICE - CUM - RESIDENCE PURPOSES. THE ASSESSEE WAS HAVING 6 UNITS OUT OF WHICH 2 UNITS ARE STATED TO BE USED FOR PROFESSIONAL PURPOSES. THE ASSESSEE HAS CLAIMED PROPORTIONATE EXPENSES RELA TING TO THESE TWO UNITS. 7 . IT COULD ALSO BE G ATHERED THAT THE SIX UNITS WERE ACQUIRED BY THE ASSESSEE IN AY 2012 - 13. THE ASSESSMENT FOR THAT YEAR WAS FRAMED BY LD. AO IN SCRUTINY ASSESSMENT U/S 143(3). APPARENTLY, ALL THE REQUISITE DETAILS AS TO ACQUISI TION OF UNITS AS WELL AS EXPENDITURE INCURRED THEREIN W ERE CA LLED FROM THE ASSESSEE WHICH WERE SUPPLIED AS WELL AS VERIFIED BY LD. AO. THE UNITS WERE SPLIT INTO TWO PARTS VIZ. UNITS WHICH WERE USED AS RESIDEN CE AND UNITS WHICH WERE USED FOR THE PURPOSE OF PROF ESSION. THE DEPRECIATION ON UNITS AS WELL AS OTHER PROPOR TIONATE EXPENDITURE WITH RESPECT TO UNITS WHICH WERE USED FOR PROFESSIONAL PURPOSES WAS CLAIMED AS WELL AS ALLOWED BY LD.AO. THUS, IT IS QUITE CLEAR THAT THESE UNITS FORM PART OF THE OPENING BLOC K OF ASSET IN THIS YEAR. AS PER THE SCHEME OF THE ACT, UNDER THE CONCEPT OF BLOCK OF ASSET, THE ASSETS WOULD LOSE INDIVIDUAL IDENTITY AND DEPRECIATION ON ASSET IS ALLOWED ON BLOCK CONCEPT NOTWITHSTANDING THE FACT THAT FEW OF THE ASSETS WERE NOT USED FOR BU SINE SS / PROFESSIONAL PURPOSES. AS LONG AS THE ASSETS REMAIN PART OF THE BLOCK AND ARE NOT PARTED WITH BY THE ASSESSEE, THE SAME REMAIN PART OF THE BLOCK OF ASSET AND DEPRECIATION IS ALLOWABLE TO THE ASSESSEE. SINCE THE DEPRECIATION ON THE BLOCK HAS BEEN A LLOW ED TO THE ASSESSEE IN EARLIER YEARS, THE SAME COULD NOT B E DENIED TO THE ASSESSEE IN THIS YEAR SINCE INDIVIDUAL ASSETS HAVE LOST THEIR SPECIFIC IDENTITY. THE CASE LAWS AS ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 10 CITED BY L D. CIT(A) IN THE IMPUGNED ORDER SUPPORT THIS VIEW AND ARE QUITE APPLICA BLE TO THE FACTS OF THE CASE. HENCE, LD. CIT(A), IN OUR CONSI DERED OPINION, HAS CLINCHED THE ISSUE IN CORRECT PERSPECTIVE. 8. EVEN OTHERWISE ALSO, A S PER THE REQUIREMENT OF SEC.32, TO BE ELIGIBLE TO CLAIM DEPRECIATION , T HE ASSESSEE MUST OWN THE ASSET AND THE ASSET MUST BE USE D FOR THE PURPOSE OF BUSINESS OR PROFESSION. THE ASSESSEE, IN OUR OPINION, HAS SATISFIED , BOTH THE SE CONDITIONS SINCE B UILDING AS WELL AS FURNITURE WAS OWNED BY THE ASSESSEE A ND THE SAME WAS USED FOR THE PURPOSE OF PROFESSION. THE ASSE SSEE HAS CLAIMED DEPRECIATION PROPORTIONA TELY ON THAT P ART ONL Y WHICH HAS BEEN U S ED FOR THE PURPOSE OF PROFESSION. THEREFO RE, THE DEPR E CATION CLAIM ON BUILDING AND FURNI TURE WOULD BE A N A LLOWABLE ALLOWANCE U/S 32. WE ORDER SO. THE GROUNDS, THUS RAISED BY R E VEN UE, STAND DISMIS SED. 9 . REGARDING INTEREST CLAIM, WE FIND THAT T HE PROVISIONS OF SEC.36(1)(III) PROVIDE FO R DED UCT ION OF INTEREST IN RESPECT OF CAP ITAL BORROWED F O R THE PURPOSE OF THE BUSINESS OR PROFESSION . THE INTEREST P AI D ON CAPITAL BORROWED FOR ACQU ISITION OF AN ASSET AFTER THE D ATE ON WHICH THE ASSET IS FIRST PUT TO USE IS AL SO ALLOWED AS DEDUCTION. TH E ASSESSEE HA S BORROWED LOAN FROM STANDARD CHARTERED BANK FOR ACQUISITION OF THE SAID PROPERTY AT OBEROI SKY HEIGHTS. THE I NTEREST PAID ON SUCH LO AN H AS BEEN BIFURCATED BETWEEN RESIDENTIAL PORTION AND OFFICE PORTION AND INTEREST PAID RELATING TO OFFICE PORTION HAS BEEN CLAIMED AS DEDUCTIO N. IT WAS THE SUBMISSIONS OF THE ASSESSEE THAT O FFICE HAS BEEN ACQUIRED FOR THE PURPOSE OF HER PROFESSION AND THE REFO RE , LOAN IS BORROWED FOR THE PURPOSE OF PROFESSION. FU RTHER , THE UNIT WAS PUT T O USE DURING F INANCIAL Y EAR 2011 - 12 RELEVANT TO ASSESSMENT YEAR 2012 - 13. THEREFO RE, PROVISO ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 11 TO SE C .36(1)(III) W OULD NOT APPLY AND WHOLE OF THE INTEREST WOULD BE AN ALLOWABLE D ED UCTION U/S 36(1)(III). W E CONCUR WITH THES E S UBMISSIONS. 10. REGARD ING SOCIETY & ELECTRICITY CHARGES, THE ASSESSEE S UBMIT S THAT THE UNIT BEING USED AS OFFICE IS A MULTI - STOREYED BUILDING BEING MANAGED BY A HOUSING SOCIETY. THE SOC IETY CHARGES MONTHLY COMPE NS ATION FOR PROVIDING VARIOUS SERVICES. THE APPELLANT HAS BIFURCATED AND CLAIMED SOCIETY CHARGES RELATING TO UNIT S USED AS OFFICE. SIMILARLY , ELECTRICITY CHARGES RELATING TO UNIT S USED AS OFFICE ARE CLAIMED AS DEDUCTION. THE SAID CLA IM I S UNDER SECTION 37( 1) WH ICH PROVIDE THAT ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHO LLY AND EXCLUSIVELY FOR THE PURPOSES OF T HE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. WE FIND THAT THE ASSESSE E FULFIL S THE PRESCRIBED CO NDITIONS OF SEC.37(1). MORE SO , THE RULE OF CONSISTENCY WOUL D DEB AR THE LD. AO TO ADOPT DIFFERENT VIEW, FA CTS REMAINING THE SAME. THE USAGE OF UNITS FOR PROFESSIONAL USE WAS ACCEPTED IN EARLIER YEARS AND SIMILAR EXPENDITURE CLAIM ED IN THAT YEAR WAS DULY ALLOWED TO THE ASSESSEE. MOREOVER, THE ASSESSEE HAS ALREADY PR ODUCE D SUFFICIENT DOCUMENTARY EVIDENCES IN THE SHAPE OF COPY OF SERVICE TAX REGISTRATION CERTIFICATE, COPIES OF COMMERCIAL CONTRACTS ENTERED INTO WITH PRODUCERS / THI R D PARTIE S , PROFESSIONAL FEES / SALES INVOICES RAISED BY THE ASSESSEE ON THIRD PARTIES ETC . ALL THESE DOCUMENTS MENTIONED ASSESSEES ADDRESS AS UNIT NO. 3 501 & 3601 AND SUPPORT THE CLAIM OF THE ASSESSEE. THE ASSESSE E HAS ALSO PRODUCED THE PHOTOGRAP HS OF THE OFFICE ALON G WITH AN A FFIDAVIT AFFIRMING ITA NO. 4428 /MUM/201 9 MS. FARAH KHAN AS SESSMENT YEAR: 2013 - 14 12 THE FACTS RELATING TO HER OFFICE AT OBEROI SKY HEIGH TS. TO OVERCOME THE DEFICI ENCY IN PHOTOGRAPH AS STATED BY THE ASSESSING O FFICER, A VIDEO RECORDING OF THE OFFICE AND RESIDENCE TO PROVE THAT A CLEARLY DEMARCATED PART IS USED AS OFFICE , WAS FURNISHED DURING THE COURSE OF HEARING. THE SAME CLEA R LY SUPP ORT T HE CASE OF THE ASSESSEE. IN OTHER WOR DS, THE ASSESSEE HAS PROVED THAT A CLEARLY DEMARCATE D PART OF THE PREM ISE WAS USED BY HER AS THE OFFICE WHICH IS DULY SUPPORTED BY VARIOUS DOCU MENTS ON REC ORD. THERE IS NOT HING ON RECORD TO DISPROVE THIS CLAIM. THE REFOR E, WE ARE OF THE CONSIDERED OPINION THAT TH E ASSESSEE HAS WELL SUBSTANTIATED HER CLAIM. T HIS BEING SO, OUR INTER FERENCE IS NOT REQUIRED IN THE IMPUGNED ORDER, IN ANY MANNER. THE G ROUNDS, THIS RAISED BY THE REV ENUE, STAND S DISMISSED. 11. RESULTANTLY, T HE AP PEAL STANDS DISMISSED. ORDER PR ONOUNCED ON 29 TH JULY 2021 . SD/ - SD/ - (JUSTICE P.P. BHATT) (MANOJ KUMAR AGGARWAL) PRESIDENT ACCOUNTANT MEMBER MUMBAI; DATED : 29.07.2021 SR.PS , JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI .