Cascade Enterprises, NEW DELHI V. ACIT, CIRCLE- 35(1), New Delhi

ITA 6736/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9099 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K KAPOOR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 6736/DEL/2017 : ASSTT. YEAR : 2014-15 CASCADE ENTERPRISES, 4, KAUL APARTMENTS, 39, RAJPUR ROAD, NEW DELHI-110054 VS ACIT, CIRCLE-35(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AA AFC2088C ASSESSEE BY : SH. R. K. KAPOOR, CA REVENUE BY : SH. AJAY KUMAR, SR. DR DATE OF HEAR ING: 03 . 0 8 .20 2 1 DATE OF PRONOUNCEMENT: 09 .0 8 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-12, NEW DELHI DATED 21.08.2 017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HAT THE NEW OFFICE SPACE BEING PURCHASED BY THE ASSESSE E TO REPLACE ITS RENTED PREMISES IS FOR EXTENSION OF EXISTING BUSINESS AND THAT THE DISALLOWANCE OF INTE REST HAS TO BE MADE ON INTEREST ON BANK LOAN. THAT THE LEARNED CIT(A) HAS ERRED IN LAW IN DISALLOWING THE DEPRECIATION IN RESPECT OF JASOLA PROPERTY ON WHOLLY UNTENABLE AND ILLEGAL GROUNDS. ITA NO.6736/DEL/2017 CASCADE ENTERPRISES 2 THAT THE FINDINGS OF THE LEARNED CIT(A) IN RESPEC T OF JASOLA PROPERTY ARE SELF-CONTRADICTORY WHILE CONCLU DING THAT JASOLA PROPERTY WAS NOT USED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW IN HOLDING THAT THE USAGES OF RESIDENTIAL PROPERTY FOR COMMERCIAL PURPOSES WOULD DISENTITLE THE ASSESSEE FROM CLAIMING THE EXPENDITURE IN RESPECT OF UPKEEP AND MAINTENANCE OF SUCH PROPERTY. 3. DURING THE YEAR, THE ASSESSEE HAS ADVANCED SUM O F RS.3,70,53,613/- TO M/S PUREARTH INFRASTRUCTURE PVT . LTD. FOR THE PURPOSE OF NEW OFFICE PREMISES . THE AO HELD THAT T HE ADVANCE WAS GIVEN FROM THE INTEREST BEARING FUNDS AND THE A SSETS AGAINST WHICH THE ADVANCE GIVEN WAS NOT PUT TO USE FOR BUSINESS PURPOSE DURING THE YEAR UNDER CONSIDERATION. 4. BEFORE US, IT WAS SUBMITTED THAT ALL THE EXPENSE S AND INTEREST HAS BEEN DULY CAPITALIZED. HENCE, THERE IS NO NEED TO DISALLOW THE INTEREST CLAIMED IN THE P&L ACCOUNT. S INCE, IT IS AN UNDEVIATING MATTER FACT TO EXAMINE WHETHER THE INTE REST PAID ON THE LOANS OBTAINED FROM HDFC FOR PURCHASE OF THE PR OPERTY IS CAPITALIZED OR NOT, THE ISSUE IS REFERRED TO THE AO TO EXAMINE THE SAME WITH A DIRECTION TO THE ASSESSEE TO PROVID E EVIDENCE BEFORE THE AO THE CAPITALIZATION OF INTEREST AND OT HER EXPENSES IN CONNECTION WITH THE ACQUISITION OF THE BUSINESS PREMISES. 5. GROUND NO. 2 RELATES TO DEPRECIATION OF MALKAGAJ OFFICE AND JASOLA OFFICE. THE AO MADE DISALLOWANCE OF EXPENSES INCURRED BY THE ASSESSEE ON ACCOUNT OF MAINTENANCE CHARGES, ELECTRICITY, PROPERTY TAX, INTEREST ON LOAN, GROUND RENT. THE AS SESSEE HAS SUBMITTED THAT JASOLA OFFICE AND MALKA GANJ PROPERT Y ARE BEING USED FOR STORAGE OF SAMPLES AND OLD ACCOUNTS RECORD S AND ITA NO.6736/DEL/2017 CASCADE ENTERPRISES 3 MALAKA GANJ PROPERTY WAS RENTED OUT AT A REGULAR IN TERVAL. THE EXPENSES HAVE BEEN DULY ALLOWED BY THE LD. CIT (A) WHO HOWEVER, CHOOSE TO DISALLOW THE DEPRECIATION. 6. WE HAVE GONE THROUGH THE RECORD. WE HOLD THAT BO TH THE PREMISES HAVE BEEN USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND ALL THE EXPENSES HAVE ALREADY STANDS A LLOWED BY THE LD. CIT (A), HENCE THERE IS NO IMPEDIMENT TO AL LOW THE DEPRECIATION ON THE SAME PREMISES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 09/08/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR