ASST CIT 11(2), MUMBAI V. FREDUN E. DEVITRE, MUMBAI

ITA 5278/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9415 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 19-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBEY
• Assessee Lawyers: J D MISTRY
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BE NCH, MUMBAI , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO.5278/M/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2010-11 THE ACIT-11(2), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. SHRI FREDUN E. DEVITRE, 20, ST. MARTINS ROAD, BANDRA(W), MUMBAI-400 050 ) !& ./ * ./ PAN/GIR NO. : AACPD 5697C ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY: SHRI SACHCHIDANAND DUBEY ,-)+ / . ! / RESPONDENT BY: SHRI J.D. MISTRY / 01& / DATE OF HEARING :19.02.2015 23( / 01& / DATE OF PRONOUNCEMENT :25.02.2015 !4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-3, MUMBAI DT. 21.5.2013 PERTAINING TO ASSESS MENT YEAR 2010-11. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS. 33,16,642/-. ITA NO. 5278/M/13 2 2.1. THE ASSESSEE IS AN ADVOCATE BY PROFESSION. T HE RETURN OF INCOME WAS FILED ON 29.9.2010 DECLARING TOTAL INCOME OF RS . 4,44,09,810/-. THE RETURN WAS SELECTED FOR SCRUTINY UNDER CASS. ACCO RDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 2.2. DURING THE COURSE OF THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRE CIATION OF RS. 33,16,642/- ON OFFICE PREMISE. THE ASSESSEE WAS AS KED TO FURNISH ELECTRICITY BILLS, WATER BILL AND MUNICIPAL TAX REC EIPT OR TELEPHONE BILLS TO PROVE THAT PREMISES HAVE BEEN PUT TO USE. THE ASSE SSEE FILED A DETAILED REPLY DT. 30.10.2012 STATING THAT HE HAS PURCHASED OFFICE PREMISE VIDE DEED OF TRANSFER DT. 24.9.2009. THE POSSESSION WAS TAKEN ON THE SAME DAY I.E. 24.9.2009. LETTER OF POSSESSION ISSUED BY THE TRANSFEROR WAS FILED WITH THE AO. IT WAS FURTHER EXPLAINED THAT THE ASS ESSEE HAS ALSO PAID ELECTRICITY CHARGES FOR THE PERIOD 22.9.2009 TO 20. 11.2009. THE SUBMISSIONS MADE BY THE ASSESSEE DID NOT FIND ANY F AVOUR WITH THE AO WHO DISBELIEVE THAT THE ASSESSEE COULD BE IN A POSI TION TO TAKE POSSESSION ON 24.9.2009 WHICH IS ALSO THE DATE OF THE TRANSFE R OF THE PROPERTY. THE AO FURTHER OBSERVED THAT THE ELECTRICITY BILLS SUBM ITTED BY THE ASSESSEE ARE IN THE NAME OF SHRI A.L. SANGHAVI. THE AO FUR THER OBSERVED THAT EVEN THE SOCIETY HAS REFERRED TO THE APPROVAL OF TH E TRANSFER BY MANAGING COMMITTEE ON 6.11.2009 EVEN THE SPLITTED SHARE CERT IFICATE ISSUED BY SOCIETY ARE DT. 23.12.2009. THE AO FINALLY CONCLUDE D BY STATING THAT THE ASSESSEE HAS NOTHING TO PROVE THAT PREMISES HAVE PU T TO USE. THE AO PROCEEDED BY DISALLOWING THE CLAIM OF DEPRECIATION AMOUNTING TO RS. 33,16,624/-. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED HIS CLAIM AND SUBMITTED RELATED DOCUMENT S TO SUBSTANTIATE THE ITA NO. 5278/M/13 3 CLAIM THAT PREMISES HAVE ACTUALLY USED BY THE ASSES SEE AND THEREFORE THE CLAIM OF DEPRECIATION IS VALID. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) OBSERVED THAT THE ASSES SEE HAS TAKEN POSSESSION ON 24.9.2009 AND HAS PAID ELECTRICITY CH ARGES. THE LD. CIT(A) FURTHER OBSERVED THAT THE AO HAS NOT BROUGHT ON RECORD TO PROVE THAT THE ASSESSEE HAS NOT USED THE SAID PREMISES FO R MORE THAN 180 DAYS. THE LD. CIT(A) WAS CONVINCED THAT EVEN IF THE PREMI SES ARE USED FOR ONE DAY, THE ASSESSEE IS ENTITLED FOR FULL DEPRECIATION . AFTER BEING CONVINCED ON THE FACTS OF THE CASE, THE LD. CIT(A) DELETED TH E DISALLOWANCE OF THE DEPRECIATION MADE BY THE AO. 4. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE AO. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHA T HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAD PURCHA SED OFFICE PREMISES VIDE TRANSFER DEED DT. 24.9.2009. IT IS ALSO AN UN DISPUTED FACT THAT THE LETTER OF POSSESSION WHICH WAS ISSUED BY THE TRANS FEROR IS DT. 24.9.2009. THE AO IS OF THE OPINION THAT A PERSON COULD NOT HA VE TAKEN POSSESSION IMMEDIATELY ON THE DATE OF TRANSFER, IT HAS TO BE UNDERSTOOD HERE THAT THE PREMISES ARE NOT AKIN TO ANY PLANT AND MACHINERY. IN CASE OF PLANT AND MACHINERY, DEPRECIATION COULD BE ALLOWED, WHEN THE PLANT AND MACHINERY COMMENCES ITS OPERATION AFTER INSTALLATION, WHICH M EANS THAT PLANT AND MACHINERY ARE USED WHEN THEY COMMENCE THEIR OPERATI ON. THUS, THERE CAN BE A TIME GAP BETWEEN THE POSSESSION OF PLANT A ND MACHINERY AND ITA NO. 5278/M/13 4 THEIR USAGE. HOWEVER, IN THE CASE OF OFFICE PREMIS ES, WHICH IS TO BE USED FOR PRACTICING THE PROFESSION OF ADVOCACY, THERE I S NO QUESTION OF ANY TIME GAP BETWEEN THE POSSESSION OF THE OFFICE PREMI SES AND THE COMMENCEMENT OF THE OPERATION BECAUSE FOR PRACTICIN G THE PROFESSION OF ADVOCACY ALL THAT IS REQUIRED IS A TABLE AND CHAIR. THUS, AN ADVOCATE CAN COMMENCE HIS PROFESSION IMMEDIATELY AFTER TAKING PO SSESSION OF THE PREMISES. FURTHER, PAYMENT OF ELECTRICITY BILL IS NOT IN DISPUTE. THE NAME HAS BEEN TRANSFERRED BY THE SOCIETY. ALL THESE FAC TS GO TO PROVE THAT THE CLAIM OF DEPRECIATION IS AS PER THE PROVISIONS OF L AW AND THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2015 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 5 DATED : . . ./ RJ , SR. PS ITA NO. 5278/M/13 5 0. !4 !4 !4 !4 / // / ,0 ,0 ,0 ,0 6!(0 6!(0 6!(0 6!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 89 ,0 , , / DR, ITAT, MUMBAI 6. 9: / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI