Ms. Chiranjiv Chhabra, New Delhi V. ITO, New Delhi

ITA 5798/DEL/2013

• Counselvise Citation: 579820114 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 32; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SMT DIVA SINGH, JM AND SH. PRASHANT MAHARIS HI, AM ITA NO. 5798/DEL/2013 ASSESSMENT YEAR: 2006-07 MS. CHIRANJIV CHHABRA K-12, HAUZ KHAS ENCLAVE NEW DELHI VS ITO WARD-37(2), NEW DELHI (APPELLANT) (RESPONDENT) PAN : AAFPC3765M ASSESSEE BY SH. ASHOK KHANDELWAL, CA REVENUE BY SHRI SUJIT KUMAR, SR. DR DATE OF HEARING : 09.10.2015 DATE OF PRONOUNCEMENT : 14.10.2015 ORDER PER PRASHANT MAHARISHI, AM: 01. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A)- XXVIII, NEW DELHI DATED 02/08/2013 RAISING ONLY ONE GROUND OF APPEAL CHALLENGING THE CONFIRMATION OF DISALLOWANCE OF DEPRECIATION OF BUILDING AT GURGAON AMOUNTING TO RS. 1,42,163/-. 02. BRIEF FACTS OF THE CASE THAT ASSESSEE IS A DOCTOR B Y PROFESSION AND FOR THE IMPUGNED ASSESSMENT YEAR RETURN OF INCOME WAS FILED ON 27 TH OCTOBER, 2006 SHOWING INCOME OF RS. 5,19,360/-. ASSESSMENT U/S 143(3) WAS ALSO MADE BY AO ON 21 ST OCTOBER, 2008 AFTER VERIFYING NECESSARY DETAILS AT THE RETURNED INCOME OF RS. 5,19,360/-. SUBSEQUENTLY NOTICE U/S 154 WAS ISSUED TO THE ASSESSEE ON THE GROUND TH AT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 142163/- ON BUILDING UNDER CONSTRUCTION THAT IS NOT ALLOWABLE TO THE ASSESSEE. HENCE, ORDER U/S 154 WAS PASSED ON 8.8.2012 MAKING DISALLO WANCE OF RS. 142163/- . THE ASSESSEE AGGRIEVED BY THE ORDER OF AO PREFERRED AN APPEAL BE FORE THE CIT (A) WHO IN TURN CONFIRMED THE DISALLOWANCE VIDE ORDER DATED 2.8.201 3. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE US. 03. DURING THE YEAR, ASSESSEE HAS SHOWN AN ADDITION OF RS. 28,43,259/- IN HIS RETURN OF INCOME TOWARDS CONSTRUCTION OF BUILDING JCM, GURGAON WHICH WAS COMPLETED DURING THE PREVIOUS ITA NO. 5798/DEL/2013 CHIRANJIV CHHABRA, NEW DELHI AY: 2006-07 2 YEAR AND WAS USED FOR LESS THAN 180 DAYS. THEREFORE , ASSESSEE CLAIMED DEPRECIATION @ 5% THEREON THEREON AMOUNTING TO RS. 142163/-. LD. AR B EFORE US SUBMITTED THAT ASSESSEE HAS CONSTRUCTED THIS BUILDING AND CLAIMED DEPRECIATION THEREON BECAUSE THE ASSET IS OWNED BY THE ASSESSEE AND USED FOR THE PURPOSES OF THE BUSIN ESS. IT WAS SUBMITTED THAT BUILDING WAS NOT UNDER CONSTRUCTION AS ALLEGED BY THE AO BUT WAS ALREADY CONSTRUCTED AND USED BY THE ASSESSEE FOR HIS PROFESSION IN SUPPORT OF THIS., HE SUBMITTED THAT (A) PERMANENT ELECTRICITY METER WAS INSTALLED IN THE PR EMISES ON 24.11.2005 (B) WATER SUPPLY PERMANENT WATER METER WAS ALSO INSTALL ED ON 1.1.2006. (C) LAST EXPENDITURE INCURRED ON CONSTRUCTION ON THAT B UILDING WAS ON 12.11.2005 AND (D) OCCUPATION CERTIFICATE IS ALSO DATED 21.10.2005 THE REFORE THE BUILDING WAS NOT UNDER CONSTRUCTION BUT WAS COMPLETE. (E) IN RESPONSE TO NOTICE U/S 154 IT WAS SUBMITTED BEFO RE THE AO VIDE LETTER DATED 16.7.2011 THAT THE BUILDING IS FULLY C ONSTRUCTED AND WAS USED FOR THE PROFESSION CARRIED ON BY THE ASSESSEE THE STAFF MEMBERS ARE ALSO WORKING FROM THAT PREMISES AND SALARY OF T HE STAFF MEMBER ARE ALSO DEBITED TO THE PROFIT AND LOSS ACCOUNT WHI CH ARE ALLOWED AS A DEDUCTION. (F) REGARDING THE DETAILS OF RESIDENCE, IT WAS SUBMITTE D VIDE LETTER DATED 30.7.2013 THAT ASSESSEE IS RESIDING THAT K-12 HAUZ KHAS ENCLAVE WHICHIS THE OLD FAMILY HOME OWNED BY THE HUSBAND OF ASSESSEE. THEREFORE, HE SUBMITTED THAT DEPRECIATION BE ALLOW ED TO THE ASSESSEE ON THAT BUILDING AS CLAIMED AS IT SATISFIES ALL THE CONDITIONS LAID DOW N U/S 32 OF THE ACT. 04. LD. DR BEFORE US SUBMITTED THAT BUILDING WAS UNDER CONSTRUCTION AND IT IS RESIDENTIAL PREMISES AND NOT PROFESSIONAL PREMISES. THEREFORE, DEPRECIATION IS RIGHTLY DISALLOWED BY AO AND CONFIRMED BY CIT (A). HE RELIED ON THE ORDER S OF LOWER AUTHORITIES. 05. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE ORDERS OF LOWER AUTHORITIES. ASSESSEE IS A LADY DOCTOR BY PROFESSION AND HAS CON STRUCTED THE PREMISES FOR RS. 28,43,259/- TITLED IN THE BOOKS OF ACCOUNTS AS CON STRUCTION ACCOUNT. ON PERUSAL OF THE ITA NO. 5798/DEL/2013 CHIRANJIV CHHABRA, NEW DELHI AY: 2006-07 3 ACCOUNTS, LAST EXPENDITURE INCURRED BY THE ASSESSEE WAS ON 12.11.2005 AND AFTER THAT, NO EXPENDITURE CONSTRUCTION OF BUILDING IS DEBITED. TH E CONFUSION MIGHT HAVE ARISEN BECAUSE OF A COPY OF ACCOUNT OF THAT, BUILDING IS TITLED AS CONSTRUCTION ACCOUNT, AND THEREFORE AO HAS TAKEN A VIEW THAT BUILDING IS UNDER CONSTRUCTIO N. HOWEVER, THE FACTS SHOWS THAT DURING THE YEAR BUILDING CONSTRUCTION WAS COMPLETE AND FOR THAT NECESSARY EVIDENCES ADDUCED BEFORE THE LOWER AUTHORITIES SUCH AS INSTALLATION OF ELECTRICITY METERS, WATER METER AND FURTHER THE CONCLUSIVE EVIDENCE IN THE FORM OF OCCU PATION CERTIFICATE ISSUED BY SENIOR TOWN PLANNER WITH EFFECT FROM 21.10.2005. FACT STATED BEFORE AO AND CIT (A) IS NOTDISPUTED BY REVENUE THAT SALARY OF STAFF WORKING IN THAT PREMIS ES WERE DEBITED IN THE BOOKS OF ACCOUNTS AND ARE ALLOWED AS DEDUCTION. REGARDING THE ISSUE R AISED BY CIT (A) THAT THIS IS A RESIDENTIAL BUILDING, ASSESSEE HAS PLACE DON RECORD LETTER DATED 30.3.2012 BY DISTRICT TOWN PLANNER THAT THE BUILDING IS TO BE USED FOR DOCTOR CONSULTANT SERVICES. FURTHER THE ASSESSEE HAS SUBMITTED CONSTANTLY BEFORE AO AS WELL AS THE C IT(A) THAT SHE IS RESIDING AT K-12 HAUZ KHAS ENCLAVE, NEW DELHI WHICH IS A FAMILY HOUSE OWN ED BY THE HUSBAND OF THE ASSESSEE. THEREFORE, THESE CONCLUSIVE EVIDENCES PROVE THAT BU ILDING WAS NOT UNDER CONSTRUCTION BUT WAS COMPLETE AND WAS OCCUPIED. IN VIEW OF THIS OVER WHELMING EVIDENCES, WE ARE OF THE VIEW THAT THE IMPUGNED PREMISES WAS COMPLETE AND US ED FOR THE PURPOSE OF THE BUSINESS BY THE ASSESSEE AS A DOCTOR AND THEREFORE SHE IS ENTIT LED FOR THE DEPRECIATION AS CLAIMED. IN VIEW OF THIS, WE REVERSE THE ORDER OF CIT (A) AND D IRECT AO TO GRANT ALLOWANCE OF DEPRECIATION OF RS. 142162/- TO THE ASSESSEE. 06. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE COURT ON 14/10/2 015) SD/- SD/- (DIVA SINGH) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14/10/2015 *B. RUKHAIYAR* COPY FORWARDED TO: 1.APPELLANT A 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ITA NO. 5798/DEL/2013 CHIRANJIV CHHABRA, NEW DELHI AY: 2006-07 4 ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 09/10/2015 2. DRAFT PLACED BEFORE AUTHOR 09/10/2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.