Housing & Urban Development Corporation Ltd. (HUDCO), V. Addl. CIT, Range-12,

ITA 686/DEL/2006

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69687 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 30-10-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 01-03-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Assessee Lawyers: K D DWIVEDI
• Keywords: Depreciation; Opportunity of being heard
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .686/DEL/2006 686/DEL/2006 686/DEL/2006 686/DEL/2006 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2002 2002 2002 2002- -- -03 0303 03 M/S HOUSING & URBAN M/S HOUSING & URBAN M/S HOUSING & URBAN M/S HOUSING & URBAN DEVELOPMENT CORPORATION DEVELOPMENT CORPORATION DEVELOPMENT CORPORATION DEVELOPMENT CORPORATION LIMITED ( LIMITED ( LIMITED ( LIMITED (HUDCO), HUDCO), HUDCO), HUDCO), HUDCO BHAWAN, HUDCO BHAWAN, HUDCO BHAWAN, HUDCO BHAWAN, INDIA HABITAT CENTRE, INDIA HABITAT CENTRE, INDIA HABITAT CENTRE, INDIA HABITAT CENTRE, LODHI ROAD, LODHI ROAD, LODHI ROAD, LODHI ROAD, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 003. 110 003. 110 003. 110 003. PAN : PAN : PAN : PAN : AAACH0632A. AAACH0632A. AAACH0632A. AAACH0632A. VS. VS. VS. VS. ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -12(1), 12(1), 12(1), 12(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.D. DWIVEDI, ADVOCATE. RESPONDENT BY : SHRI R.S. MEENA, CIT-DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XV, NEW DELHI DATED 30 TH JANUARY, 2006 FOR THE AY 2002- 03. 2. GROUND NO.1 READS AS UNDER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.35,57,615/- BEING REVERSAL OF INCOME. 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E REVERSED THE INCOME OF ` 0.35 CRORES CREDITED ON ACCOUNT OF OVERHEAD CHARGES ON ANDREWS GANJ PROJECT. WHEN ASKED BY THE ASSESSING OFFICER TO EXPLAIN THE REASON FOR REVERSAL, IT WAS EXPLAINED BY THE AS SESSEE THAT NO SUCH OVERHEAD CHARGES WERE LEVIABLE ON GENERAL POOL ACCO MMODATION AND, ITA-686/DEL/2006 2 AS SUCH, THE EXCESS OVERHEAD CHARGES WERE WRITTEN O FF. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES EXPLANATION W ITH THE FOLLOWING FINDING:- 3.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSES SEE BUT I AM UNABLE TO ACCEPT THE SAME. THE ASSESSEE H AS RELIED ON THE MINUTES OF MEETING HELD ON 7.09.95 TO HOLD THAT THE ADMINISTRATIVE AND OVERHEAD CHARGES OF 1.5 % WERE PAYABLE TO IT ONLY IN RESPECT OF THE COST OF CONSTR UCTION OF THE COMMUNITY CENTER AND NOT ON THE COST OF CONSTRU CTION OF THE RESIDENTIAL FLATS CONSTRUCTED FOR THE CENTRA L GOVERNMENT. IN MY OPINION, THE MINUTES DOES NOT LI MIT THIS PAYMENT TO THE COST OF CONSTRUCTION OF THE COMMUNIT Y CENTER ALONE. PARA 3 OF THE MINUTES READS AS UNDER : IN VIEW OF THIS IT WAS AGREED THAT THE EXPENSES IN CURRED BY THE PSE DURING THE PLANNING, DEVELOPMENT AND EXECUT ION OF THE PROJECT SHOULD BE REIMBURSED TO IT ON ACTUAL BA SIS. FURTHER, THE ADMINISTRATIVE CHARGES AND CONTINGENCI ES, AS INCURRED BY HUDCO IN THIS PROCESS SHOULD FORM BASIS OF THE ACTUAL EXPENSES INCURRED WHICH CAN BE ADJUSTED OUT OF THE SURPLUSES AVAILABLE WITH THE ORGANISATION. IT WAS DECIDED THAT HUDCO WILL BE ALLOWED AN INTEREST COMPONENT OF 17% PER ANNUM AND AN ADMN. AND OVERHEAD CHARGES OF 1-1/ 2% THE COMPONENT OF 1-1/2% REPRESENTING ADMN. AND OTHER OVERHEAD CHARGES MAY BE CALCULATED ON THE COMPUTED COST OF THE PROJECT. 3.2 THE ANDREWS GANJ PROJECT, AS DISCUSSED EARLIER, CONSISTED NOT ONLY OF THE COMMUNITY CENTER BUT ALSO OF THE RESIDENTIAL FLATS FOR CENTRAL GOVERNMENT. IN MY OP INION, THE ASSESSEE HAS INCORRECTLY REVERSED THE ADMINISTR ATIVE AND OVERHEAD CHARGES ON THE RESIDENTIAL UNITS CONST RUCTION AND THE SAME IS DISALLOWED. THE ADDITION IS RS.35, 57,615/- . 4. ON APPEAL, LEARNED CIT(A) ALSO SUSTAINED THE ORD ER OF THE ASSESSING OFFICER IN THIS REGARD. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE REITERATED THE SAME ARGUMENT AS WAS RAISED BEFORE THE ASSESSING OFFICER THAT THE OVERHEAD CHARGES WERE NO T LEVIABLE ON GENERAL POOL ACCOMMODATION. HOWEVER, WE FIND THAT THE ASSESSING ITA-686/DEL/2006 3 OFFICER HAS REPRODUCED THE RELEVANT PORTION OF THE MINUTES FROM WHICH IT IS EVIDENT THAT THE ASSESSEE IS ENTITLED TO OVER HEAD CHARGES OF ONE AND HALF PERCENT ON THE COMPUTED COST OF THE PROJEC T. THE COMPUTED COST OF THE PROJECT WOULD INCLUDE COST OF THE ENTIR E PROJECT INCLUDING GENERAL POOL ACCOMMODATION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF LOWER AUTHORITIES IN THIS REGARD. ACCORDINGLY, GROUND NO.1 OF THE ASSESSEES APPEAL IS REJECTED. 6. GROUND NO.2 OF THE ASSESSEES APPEAL READS AS UN DER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.1,45,00,000/- AS PRIOR PERI OD EXPENDITURE. 7. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E CLAIMED THE DEDUCTION FOR PRIOR PERIOD EXPENSES AMOUNTING TO ` 1,45,00,000/-. THE DISALLOWANCE IS SUSTAINED BY THE LEARNED CIT(A). 8. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT PRIOR PERIOD EXPENDITURE WAS COMPRISIN G OF TRAVELING EXPENSES, RATES AND TAXES, REPAIRS, MAINTENANCE EXP ENSES, STAMP DUTY CHARGES ETC. IT IS CLAIMED THAT THESE EXPENSES HAV E COME TO THE NOTICE DURING THE YEAR EITHER BECAUSE THE BILLS WERE NOT R ECEIVED IN TIME OR THE BRANCHES HAD NOT COMMUNICATED THE SAME TO THE H EAD OFFICE IN TIME. THUS, THE BILLS HAVE BEEN SETTLED WHICH HAVE CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE , IT IS CLAIMED THAT THE PRIOR PERIOD EXPENSES ARE ALLOWABLE IN THE YEAR UNDER CONSIDERATION. 9. LEARNED DR, ON THE OTHER HAND, HAS RELIED UPON T HE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE I S FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND, IN THE MERCANT ILE SYSTEM OF ITA-686/DEL/2006 4 ACCOUNTING, THE EXPENDITURE WHICH IS ACCRUED OR CRY STALLIZED DURING THE YEAR UNDER CONSIDERATION CAN ONLY BE ALLOWED. THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THAT THE PRIOR PERIOD EXPENS ES HAVE CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. HE, THEREFORE , SUBMITTED THAT THE ORDER OF AUTHORITIES BELOW SHOULD BE SUSTAINED. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS A SETTLED LAW THAT WHEN THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE PRIOR PERIOD EXPENSES CAN BE ALLOWED IN THE SUBSEQU ENT YEAR IN WHICH SUCH EXPENSES HAVE CRYSTALLIZED. HOWEVER, WE FIND THAT NONE OF THE LOWER AUTHORITIES HAD EXAMINED THIS ASPECT. IN FAC T, THE ASSESSEE HAS ALSO NOT GIVEN COMPLETE DETAILS OF THE PRIOR PERIOD EXPENSES AND HAS NOT EXPLAINED HOW SUCH EXPENSES HAVE CRYSTALLIZED D URING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UND ER CONSIDERATION. IN VIEW OF THE ABOVE WE SET ASIDE THE ORDERS OF LOW ER AUTHORITIES ON THIS POINT AND RESTORE THE MATTER TO THE FILE OF THE ASS ESSING OFFICER. WE DIRECT THE ASSESSEE TO FURNISH COMPLETE DETAILS OF PRIOR PERIOD EXPENSES OF ` 1,45,00,000/- AND ALSO EXPLAIN HOW THE SAME HAVE CR YSTALLIZED DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT Y EAR UNDER APPEAL. THEREAFTER, THE ASSESSING OFFICER WILL EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AND WILL PASS A SPEAKING ORDER THEREON. 11. GROUND NO.3 OF THE ASSESSEES APPEAL READS AS U NDER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.15,53,43,413/- BEING INTERE ST ACCRUED BUT NOT DUE ON FOREIGN LOANS. 12. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO BE COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2000-01 & 2001- ITA-686/DEL/2006 5 02, WHEREIN, VIDE ORDER DATED 7 TH APRIL, 2009 IN ITA NOS.2826 & 2827/DEL/2004, THE ITAT HELD AS UNDER:- GROUND NO.2 FOR BOTH THESE YEARS IS TO THE EFFECT THAT THE LEARNED CIT(APPEALS) ERRED IN NOT ALLOWING THE EXPE NDITURE BY WAY OF INTEREST WHICH ACCRUED ON FOREIGN CURRENC Y LOANS BUT WAS NOT DUE FOR PAYMENT. THE EXPENDITURE WAS RS.16,69,36,089/- FOR ASSESSMENT YEAR 2000-01 AND RS.18,78,31,858/- FOR ASSESSMENT YEAR 2001-02. IT WAS THE COMMON POSITION OF BOTH THE PARTIES THAT THIS ISSUE STANDS COVERED BY THE ORDER OF B BENCH OF DELHI TRIBUNAL FOR ASSESSMENT YEAR 1998-99 IN ITA NO.2041(DEL)/2002 DA TED 30.4.2008, A COPY OF WHICH WAS PLACED IN THE PAPER BOOK ON PAGES 11 TO 19. THE LEARNED COUNSEL ALSO POINTE D OUT THAT THIS ORDER WAS FOLLOWED BY THE B BENCH OF DE LHI TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1999-00 IN ITA NO.140(DEL)/2003 DATED 30.5.2008, A COPY OF WHICH WAS PLACED IN THE PAPER BOOK ON PAGES 20 T O 23. THE ISSUE IS DECIDED BY THE TRIBUNAL IN ITA NO.2041(DEL)/2002 IN PARAGRAPHS 35, 36 AND 37, IN W HICH IT WAS HELD THAT INTEREST ACCRUING ON LOANS OBTAINED I N FOREIGN CURRENCY FROM ASIAN DEVELOPMENT BANK AND JAPAN BANK OF INTERNATIONAL COOPERATION IS DEDUCTIBLE IN COMPUTIN G THE INCOME EVEN THOUGH IT HAS NOT BECOME PAYABLE. FOR THE SAKE OF READY REFERENCE, THESE PARAGRAPHS ARE REPRO DUCED BELOW:- 35. WE HAVE HEARD BOTH THE PARTIES. THERE IS NO D ISPUTE THAT THE ASSESSEE HAD OBTAINED LOANS IN FOREIGN CUR RENCY FROM ASIAN DEVELOPMENT BANK AND THE JAPAN BANK OF INTERNATIONAL COOPERATION. THE AO HAS DISALLOWED T HE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE LIABIL ITY DID NOT CRYSTALLIZE IN THE YEAR UNDER CONSIDERATION. T HE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG. THEREFORE, THE LIABILITY TO PAY INTEREST ACCRUED ON THE LAST DAY OF THE ACCOUNTING YEAR. THE ASSESSEE HAS PAID THE AMOUNT OF INTEREST IN JUNE AND AUGUST, 1998. 36. HON'BLE SUPREME COURT IN THE CASE OF BHARAT EAR TH MOVERS VS. CIT, 245 ITR 428 (S.C.) HELD THAT WHERE A BUSINESS LIABILITY HAD ARISEN IN THE ACCOUNTING YEA R, THE DEDUCTION SHOULD BE ALLOWED ALTHOUGH THE LIABILITY MIGHT HAVE BEEN QUANTIFIED AND DISCHARGED AT A FUTURE DAT E. WHAT SHOULD BE CERTAIN IS THE INCURRING OF LIABILIT Y. IT SHOULD ALSO BE CAPABLE OF BEING ESTIMATED WITH REASONABLE CERTAINTY THOUGH THE ACTUAL QUANTIFICATION MAY NOT BE POSSIBLE. IF THE REQUIREMENTS ARE SATISFIED, THE L IABILITY IS ITA-686/DEL/2006 6 NOT A CONTINGENT ONE. THE LIABILITY IS IN PRESENTI THOUGH IT WILL BE DISCHARGED AT A FUTURE DATE. IT DOES NOT M AKE ANY DIFFERENCE IF THE FUTURE DATE ON WHICH THE LIABILIT Y SHALL HAVE TO BE DISCHARGED IS NOT CERTAIN. 37. IF THE FACTS OF THE CASE ARE EXAMINED IN THE LI GHT OF DECISION OF HON'BLE SUPREME COURT, WE FIND THAT INT EREST HAS ACCRUED AT DEFINITE RATE FIXED BY THE PARTIES. THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG. THEREFORE, THE INTEREST LIABILITY HAS CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION AND IS ALLOWABLE AS DEDUCT ION U/S 37(1) OF THE ACT. WE ACCORDINGLY SET ASIDE THE ORD ER OF THE LD.CIT(APPEALS) AND DIRECT THE AO TO ALLOW THE CLAI M OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE AFORESAID ORDER, THESE G ROUNDS ARE ALLOWED FOR BOTH THE YEARS. 13. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE, WE DIRECT THE ASSESSING OFFICE R TO ALLOW DEDUCTION OF INTEREST ACCRUED ON SUCH FOREIGN LOANS . 14. GROUND NO.4 OF THE ASSESSEES APPEAL READS AS U NDER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.17,79,63,672/- BEING FINANC IAL CHARGES WRITTEN OFF. 15. WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVO UR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 7 TH APRIL, 2009 (SUPRA) RENDERED IN ASSESSEES OWN CASE WHEREIN IT WAS HELD AS UNDER:- 6. GROUND NO.3 FOR ASSESSMENT YEAR 2000-01 AND GROUND NO.4 FOR ASSESSMENT YEAR 2001-02 ARE ALSO SI MILAR TO THE EFFECT THAT THE LEARNED CIT(APPEALS) ERRED I N NOT ALLOWING THE EXPENDITURE INCURRED ON ISSUE OF BONDS , DEBENTURES AND OTHER BORROWINGS. THE EXPENDITURE F OR ASSESSMENT YEAR 2000-01 IS STATED TO BE RS.2,73,59, 951/- AND FOR ASSESSMENT YEAR 2001-02 TO BE RS.3,21,53,45 5/-. AGAIN, IT WAS THE COMMON GROUND OF BOTH THE PARTIES THAT THE ISSUE STANDS COVERED BY THE ORDER OF THE TRIBUN AL IN THE ITA-686/DEL/2006 7 CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1997-98 IN ITA NO.2040(DEL)/2002 DATED 30.4.2008, A COPY OF WHICH WAS PLACED BEFORE US. THE ISSUE IS COVERED BY PARAGRAP H NO.16, IN WHICH IT WAS MENTIONED THAT THE FACTS PLA CED BEFORE THE AO WERE NOT PROPERLY EXAMINED AND, THERE FORE, THE MATTER WAS RESTORED TO THE FILE OF THE AO FOR D ECIDING THE ISSUE AFRESH BY TAKING INTO ACCOUNT THE DECISIO NS IN THE CASE OF CIT VS. THIRANI CHEMICALS (2007) 291 ITR 19 6 (DEL); AND MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. V S. CIT (1997) 225 ITR 802 (SC). THIS PARAGRAPH READS AS U NDER:- 16. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL PLACED ON RECORD. IT IS EVIDENT FROM ASSESSMENT ORDER THAT ASSESSING OFFICER HAD NOT EXA MINED THE ISSUE IN THE LIGHT OF MATERIAL FILED BEFORE HIM . HE HAS SIMPLY DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUNDS THAT THE RELEVANT DETAILS WERE NOT FILED BY THE ASS ESSEE. SIMILAR ISSUE CAME FOR OUR CONSIDERATION IN ASSESSM ENT YEAR 1996-97 IN ITA NO.1040(DEL)/2002 IN ASSESSEES OWN APPEAL. THE MATTER HAS BEEN RESTORED TO THE FILE O F THE ASSESSING OFFICER VIDE ORDER DATED 31.8.2007 WITH T HE DIRECTIONS TO DECIDE THE MATTER ON MERITS AS PER TH E PROVISIONS OF LAW. SINCE IDENTICAL ISSUE IS INVOLV ED WE SET ASIDE THE MATTER TO THE FILE OF ASSESSING OFFICER W ITH THE SIMILAR DIRECTIONS. HOWEVER, HE WILL KEEP IN VIEW THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. THIRANI CHEMICALS (2007) 290 ITR 196 AND TH E DECISION OF APEX COURT IN THE CASE OF MADRAS INDUST RIAL INVESTMENT CORPORATION LTD. VS. CIT (1997) 225 ITR 802, WHILE DECIDING THE ISSUE. FOLLOWING THIS ORDER, THE MATTER IS RESTORED TO THE FILE OF THE AO FOR DECIDING THE ISSUE AGAIN AFTER HEARING THE A SSESSEE AND CONSIDERING THE DETAILS AND ALSO TAKING AFORESA ID DECISIONS INTO ACCOUNT. THUS, THESE GROUNDS ARE TR EATED AS ALLOWED. 16. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE T RIBUNAL, WE SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO DECIDE THE SAME AFRESH KEEPING IN VIEW THE DIRECTIO NS OF THE TRIBUNAL GIVEN ABOVE. NEEDLESS TO SAY THAT HE WILL ALLOW AD EQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 17. GROUND NO.5 OF THE ASSESSEES APPEAL READS AS U NDER:- ITA-686/DEL/2006 8 THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.1,32,822/- BEING DEPRECIATI ON IN RESPECT OF ASSETS ADDED TO THE BLOCK AFTER 30.09.20 01. 18. WE FIND THIS ISSUE ALSO TO BE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 7 TH APRIL, 2009 (SUPRA) IN ASSESSEES OWN CASE, WHEREIN THE ITAT HELD AS UNDER:- 7. GROUND NO.4 FOR ASSESSMENT YEAR 2000-01 AND GROUND NO.5 FOR ASSESSMENT YEAR 2001-02 ARE SIMILAR IN NATURE TO THE EFFECT THAT THE LEARNED CIT(APPEALS) ERRED IN NOT ALLOWING DEPRECIATION ON BOOKS @ 100%, BEING RS.1,25,458/- FOR ASSESSMENT YEAR 2000-01 AND RS.70 ,049/- FOR ASSESSMENT YEAR 2001-02. AFTER HEARING BOTH TH E PARTIES, IT WAS NOTED THAT WHILE HUNDRED PER CENT DEPRECIATION IS DEDUCTIBLE ON BOOKS OWNED BY LENDIN G LIBRARIES AND PROFESSIONALS, THE RATE OF 60% IS APP LICABLE IN RESPECT OF OTHER CASES. IN VIEW THEREOF, THE LEARN ED COUNSEL ALSO DID NOT PERSIST WITH THE ARGUMENTS FUR THER. IN VIEW OF THE FACT THAT THE ASSESSEE IS NEITHER A LEN DING LIBRARY NOR A PROFESSIONAL, IT IS HELD THAT THE LEA RNED CIT(APPEALS) WAS RIGHT IN ALLOWING DEPRECIATION @ 6 0%. THEREFORE, THESE GROUNDS ARE DISMISSED. 19. IN VIEW OF THE ABOVE DECISION OF THE ITAT RENDE RED IN ASSESSEES OWN CASE FOR THE EARLIER YEARS, WE DIRECT THE ASSES SING OFFICER TO ALLOW DEPRECIATION ON BOOKS @ 60%. 20. GROUND NO.6 OF THE ASSESSEES APPEAL RELATING T O DISALLOWANCE OF A SUM OF ` 500/- BEING FEE FOR RAISING SHARE CAPITAL WAS NOT P RESSED AT THE TIME OF HEARING. ACCORDINGLY, THE SAME IS REJE CTED. 21. GROUND NO.7 READS AS UNDER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.38,81,222/- BEING DEPRECIAT ION ON ESTIMATED INCREASE IN COST OF PROPERTIES. ITA-686/DEL/2006 9 22. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL PLACED BEFORE US. THE ASSESSEE HAS CLAIMED DEPRECIATION O N THE ESTIMATED INCREASE IN THE VALUE OF THE ASSETS. HOWEVER, IT I S A SETTLED LAW THAT DEPRECIATION IS TO BE ALLOWED ON THE ACTUAL COST OF ASSETS TO THE ASSESSEE AND NOT ON THE BASIS OF ENHANCED COST OF T HE ASSETS ON ESTIMATE BASIS. WE, THEREFORE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE ASSESSING OFFICER WHEREIN HE DISALLOWED DEPRECI ATION ON ESTIMATED INCREASE IN THE COST OF PROPERTIES. 23. GROUND NO.8 OF THE ASSESSEES APPEAL READS AS U NDER:- THE LEARNED ASSESSING OFFICER HAS ERRED IN FACT IN DISALLOWING A SUM OF RS.61,000/- BEING DISALLOWANCE U/S 14A. 24. WE FIND THIS ISSUE TO BE SQUARELY COVERED BY TH E DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MA XOPP INVESTMENT LTD. & ORS. VS. CIT [2012] 247 CTR (DEL) 162. WE, THE REFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS POINT AND RESTO RE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO BE READJUDICATED I N THE LIGHT OF THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT . 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 20.12.2013 VK. ITA-686/DEL/2006 10 COPY FORWARDED TO: - 1. APPELLANT : M/S HOUSING & URBAN DEVELOPMENT M/S HOUSING & URBAN DEVELOPMENT M/S HOUSING & URBAN DEVELOPMENT M/S HOUSING & URBAN DEVELOPMENT CORPORATION LIMITED (HUDCO), HUDCO BHAWAN, CORPORATION LIMITED (HUDCO), HUDCO BHAWAN, CORPORATION LIMITED (HUDCO), HUDCO BHAWAN, CORPORATION LIMITED (HUDCO), HUDCO BHAWAN, INDIA HABITAT CENTRE, LODHI ROAD,NEW DELHI INDIA HABITAT CENTRE, LODHI ROAD,NEW DELHI INDIA HABITAT CENTRE, LODHI ROAD,NEW DELHI INDIA HABITAT CENTRE, LODHI ROAD,NEW DELHI 110 003. 110 003. 110 003. 110 003. 2. RESPONDENT : ADDITIONAL COMMISSIONER OF INCOME T AX, ADDITIONAL COMMISSIONER OF INCOME TAX, ADDITIONAL COMMISSIONER OF INCOME TAX, ADDITIONAL COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -12(1), NEW DELHI. 12(1), NEW DELHI. 12(1), NEW DELHI. 12(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR