ACIT 17(2), MUMBAI V. BURGIS KEKI DARUWALLA, MUMBAI

ITA 7102/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92450 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNIDR
• Keywords: Depreciation
• Section: 32

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.7102/MUM/2010 ASSESSMENT YEAR: 2006-07 ASST. COMMISSIONER OF INCOME TAX-17(2), ROOM NO.217, PIRAMAL CHAMBERS, MUMBAI-400012 / VS. SHRI BURGIS KEKI DARUWALLA, 691, ALBLESS BLDG, DR. DINSHAW MASTER ROAD, PARSI COLONY, DADAR, MUMBAI-400014 ( ! / REVENUE) ( '#$ % /ASSESSEE) P.A. NO. ACFPD8168B ! / REVENUE BY SMT. N.V. NADKARNI-DR '#$ % / ASSESSEE BY SHRI HORMUZD JAMSHEDJI & ! ' % ( / DATE OF HEARING 13/04/2015 ' % ( / DATE OF ORDER: 24/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 27/07/2010 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI, DELETING THE PENALTY OF RS.10,72,500/-, IMP OSED U/S 271(1)(C) OF THE ACT. SHRI BURGIS KEKI DARUWALLA 2 2. AT THE TIME OF HEARING, SHRI VIVEK BATRA, LD. D R, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE G ROUND RAISED BY SUBMITTING THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF HIS INCOME BY CLAIMING DEDUCTION ON THE BASIS OF INCORRECT FACTS, THEREFOR E, THE PENALTY WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER . PLEA WAS ALSO RAISED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE PENALTY IGNORING THE FACTUAL MATRIX. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE , SHRI HORMUZD JAMSHEDJI, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY SUBMITTING THAT NEITHER THERE IS CONCEALMENT OF INCOME NOR FURNISHED INACCURATE PARTICULAR OF SUCH INCOME. IT WAS ALSO PLEADED THA T THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN HIS OWN CASE FOR AY 2006-07 AND 2007-08 (ITA NO.4564/MUM/2009 AND 7464/MUM/2010) ORDER DATED 26/02/2015. THIS FACTUAL MATRIX WAS NOT CONTROVERTE D BY THE REVENUE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL DATED 26/02/2015 FOR READY REFERENCE AND PERUSAL:- 2. THE ASSESSEE IS A CIVIL CONTRACTOR FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE RETURN FOR A.Y . 2006-07 WAS FILED ON 20.10.2006 DECLARING TOTAL INCOME OF RS.2,19,22,334/-. THE RETURN WAS SELECTED SHRI BURGIS KEKI DARUWALLA 3 FOR SCRUTINY ASSESSMENT AND ACCORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 3. WHILE SCRUTINIZING THE RETURN OF INCOME, THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE TENANCY RIGHT AT RS.3S.7S LACS. PERUSAL OF T HE DEP RECIATION CHART SHOWED THAT THE ASSESSEE HAD ACQUIRED OFFICE PREMISES TENANCY RIGHT FOR RS.1.43 CRORES AND HAD CLAIMED DEPRECIATION OF RS.3S.7S LAC S @ 25% ON IT. THE ASSESSEE WAS ASKED TO SUBMIT THE DOCUMENTS PERTAINING TO THE ACQUISITION OF TENANCY RIGHT AND TO EXPLAIN AS TO HOW THE DEPRECIATION IS ALLOWABLE. THE ASSESSEE FILED DETAILED REPLY EXPLAINING THE ACQUISITION OF OFFICE PREMISES BY WA Y OF TENANCY RIGHT AND FURTHER EXPLAINED THE ACQUISIT ION OF OFFICE PREMISES BY WAY OF TENANCY RIGHT AND FURTHER EXPLAINED THAT THE DEPRECIATION IS ALLOWABL E BECAUSE OF THE AMENDMENT ' BROUGHT TO SECTION 32 OF THE ACT W.E.F. 01.04.1998 BY WHICH DEPRECIATION WAS ALLOWABLE ON INTANGIBLE ASSETS. AFTER GOING THROUGH THE LEASE AGREEMENT AND VARIOUS DETAILS FILED BY TH E ASSESSEE, THE AO CAME TO THE CONCLUSION THAT THE CLAIM OF DEPRECIATION AS INTANGIBLE ASSET IS NOT AS PER THE PROVISIONS OF THE LAW. THE AO OBSERVED THAT THE TENANCY RIGHTS IS NOT AKIN TO THE INTANGIBLE ASSETS MENTIONED IN SECTION 32(1)(II} OF THE ACT AND, THEREFORE, NOT DEPRECIABLE IN NATURE. THE DEPRECIAT ION CLAIMED BY THE ASSESSEE WAS DISALLOWED. THE ASSESSEE CARRIED THE MATTER BEFORE THE C!T(A). THE CLAIM OF THE ASSESSEE BEFORE THE CIT(A) WAS TWOFOLD . FIRSTLY, DEPRECIATION @25% SHOULD BE ALLOWED SHRI BURGIS KEKI DARUWALLA 4 TREATING TENANCY RIGHT AS INTANGIBLE ASSET AND SECONDLY, IN ALTERNATIVE TENANCY RIGHTS ARE IN PERPETUITY AND, THEREFORE, DEPRECIATION @10% TO OFF ICE BUILDING SHOULD BE ALLOWED. THE CIT(A) REJECTED THE FIRST CLAIM OF THE ASSESSEE BY UPHOLDING THE FINDIN GS OF THE AO THAT TENANCY RIGHTS IS NOT AKIN TO INTANG IBLE ASSETS. FURTHER, THE CIT(A) AFTER GIVING A THOUGHTF UL CONSIDERATION TO THE FACTS OF THE CASE ALLOWED DEPRECIATION AT THE RATE APPLICABLE TO THE BUILDING S. HOWEVER, THE CIT(A) ALLOWED THE CLAIM OF DEPRECIATI ON @10% ON AND FROM A.Y. 2007-08. 4. AGGRIEVED BY THIS FINDING OF THE CIT(A) BOTH THE REVENUE AND THE ASSESSEE ARE IN APPEAL. THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) OUGHT N OT TO HAVE ALLOWED DEPRECIATION @10%. THE ASSESSEE'S GRIEVANCE IS TWOFOLD. FIRSTLY, IT IS THE CLAIM OF T HE ASSESSEE THAT TENANCY RIGHT SHOULD BE TREATED AS INTANGIBLE ASSET AND DEPRECIATION @25% SHOULD BE ALLOWED. SECONDLY, IN ALTERNATIVE, THE CIT(A) ERRED IN NOT ALLOWING DEPRECIATION @1O% ON AND FROM A.Y. 2006-07. IN SO FAR AS THE FIRST CLAIM OF THE ASSESS EE THAT TENANCY RIGHT IS AKIN TO INTANGIBLE ASSET THER EFORE [DEPRECIATION @25% SHOULD BE ALLOWED IS CONCERNED, IT HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE IN THE CASE OF DABUR INDIA LIMITED IN ITA NO. 4679JMUM/2012 FOR A.Y. 2009-10, VIDE ORDER DATED 23.08.2013 WHILE DISMISSING THE CLAIM OF THE ASSESSEE, THE TRIBUNAL AT PARA 4 OF ITS ORD ER HELD AS UNDER: SHRI BURGIS KEKI DARUWALLA 5 4. WE ARE NOT CONVINCED WITH THE CONTENTION ADVANCED ON BEHALF OF THE ASSESSEE. THE MANIFEST REASON IS THE FOLLOWING .DEFINITION OF THE TERM 'INTANGIBLE' ASSET GIVEN IN EXPLANATION (3) TO SECTION 32(1) :- '(B) INTANGIBLE ASSETS, BEING KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE'. 5. A BARE PERUSAL OF THE DEFINITION OF INTANGIBLE A SSETS ON WHICH DEPRECIATION IS AVAILABLE U/S 32 MAKES IT VIV ID THAT THE INTANGIBLE ASSETS SO CLASSIFIED. ARE KNOW-HOW; PATENTS, COPYRIGHTS, TRADE MARKS, LICENCES, FRANCHISES OR AN Y OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. WE ARE REMINDED OF THE RULE OF NOSTICUR A SOCIIS WHICH SIM PLY MEANS THAT THE GENERAL WORDS ASSOCIATED WITH THE SP ECIFIC WORDS DRAW THEIR MEANING FROM THE COMPANY THEY KEEP . THIS RULE HAS BEEN QUOTED WITH APPROVAL BY THE HON' BLE SUPREME COURT IN SEVERAL JUDGMENTS INCLUDING CIT VS . VENKETASWARA HATCHERIES (1999) 237 ITR 174 (SC), STONECRAFT ENTERPRISES VS. CIT (1999) 237 ITR 131(S C) AND ARAVINDA PARAMILLA WORKS VS. CIT (1999) 237 ITR 284 (SC). GOING BY THIS RULE, THE EXPRESSION 'ANY OTHER BUSINESS OR COMMERCIAL RIGHTS'} AS EMPLOYED IN THE DEFINITION OF 'INTANGIBLE' ASSETS AS PET THE ABOVE EXPLANATION, MUST MEAN ONLY THE INTANGIBLE ASSETS S IMILAR TO THOSE WHICH PRECEDE IT, THAT IS, 'KNOW-HOW, PATE NTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES'. THE FORMER CATEGORY OF INTANGIBLE ASSETS INCLUDES SUCH ASSETS WITH WHICH THE BUSINESS IS DIRECTLY CARRIED ON. IN OTHER WORDS, THESE ARE INTANGIBLE ASSETS BY WHICH EITHER THE PER MISSION TO CARRY ON THE BUSINESS OR MANUFACTURE IS RECEIVED .OR ARE USED FOR THE MANUFACTURE OR THE SALE OF THE PRODUCT S MANUFACTURED. SUCH INTANGIBLE ASSETS DIRECTLY FACIL ITATE THE PROFIT EARNING ACTIVITY. ON THE OTHER HAND, THE TEN ANCY RIGHTS HAVE NO SIGNIFICANCE WHATSOEVER EITHER WITH A RIGHT TO MANUFACTURE OR ACTUAL MANUFACTURE OF THE PRODUCT S OR THEIR SALE CARRYING BRAND NAME OR LOGO ETC. TENANCY RIGHTS SIMPLY PROVIDE A PLACE AT WHICH MANUFACTURING OR SHRI BURGIS KEKI DARUWALLA 6 ADMINISTRATIVE ACTIVITY IS PERSUED. A BUSINESSMAN C AN CARRY ON MANUFACTURING A AN PLACE BUT THE BUSINESS CANNOT BE CARRIED ON WITHOUT LICENCE, OR WITHOUT S PECIFIC KNOW-HOW, COPY RIGHT, OR TRADE MARK ETC. REVERTING TO THE EXTANT CASE, ONLY AN INTANGIBLE ASSET OF THE NATURE OF KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES , FRANCHISES ETC. CAN BE BROUGHT WITHIN THE AMBIT OF 'ANY OTHER BUSINESS OR COMMERCIAL RIGHT'. THE LEGISLATUR E HAS MADE ITS INTENTION CRYSTAL CLEAR BY THE USE OF WORD S 'OF SIMILAR NATURE' IMMEDIATELY AFTER THE WORDS 'ANY OT HER BUSINESS OR COMMERCIAL RIGHTS'. THIS MAKES THE POSITION BEYOND ANY PALE OF DOUBT THAT 'ANY OTHER BUSINESS O R COMMERCIAL RIGHTS' WOULD ONLY BE SUCH WH ICH ARE OF THE NATURE OF KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS , LICENCES, FRANCHISES ETC. AS NOTICED SUPRA, THERE I S A VAST DIFFERENT BETWEEN KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARK, LICENCES, FRANCHISES ETC. ON ONE HAND AN D TENANCY RIGHTS ON THE OTHER, WE ARE OF THE CONSIDER ED OPINION THAT TENANCY RIGHTS CANNOT BE CONSTRUED AS 'INTANGIBLE' ASSETS FALLING WITHIN THE MEANING OF EXPLANATION 3 TO SECTION 32(1). THE RELIANCE OF THE ID. DR ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN TEC HNO SHARES (SUPRA) IS OF NO CONSEQUENCE. IN THAT CASE T HE QUESTION WAS WHETHER DEPRECIATION CAN BE GRANTED ON THE BOMBAY STOCK EXCHANGE MEMBERSHIP CARD. AS THE OWNERSHIP OF SUCH MEMBERSHIP CARD IS SINE QUA NON T O CONDUCT THE BUSINESS ON THE FLOOR OF STOCK EXCHANGE , THE HON'BLE SUPREME COURT HELD IT TO BE AN INTANGIBLE A SSET ELIGIBLE FOR DEPRECIATION. SUCH MEMBERSHIP CARD IS A PERMISSION TO DO THE BUSINESS AS SHARE BROKER AKIN TO 'LICENCE' AND NOT A PLACE FOR CARRYING ON SUCH BUSI NESS AKIN TO 'TENANCY RIGHT'. IN OUR CONSIDERED OPINION, THIS JUDGMENT DOES NOT ADVANCE THE CASE OF THE ASSESSEE ANY FURTH ER. TO SUM UP, WE HOLD THAT SINCE THE TENANCY RIGHT CANNOT BE TREATED AS AN INTANGIBLE ASSET, THERE IS NO QUESTIO N OF ALLOWING DEPRECIATION ON IT. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE AUTHORITIES BELOW ON THIS ISSUE. THIS GROUND FAILS. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH, ASSESSEE'S CLAIM FOR DEPRECIATION @25% ON TENANCY RIGHT IS DISMISSED. SHRI BURGIS KEKI DARUWALLA 7 5. NOW COMING TO THE ALTERNATIVE CLAIM OF THE ASSES SEE, WE FIND THAT C!T(A) HAS VERY ELABORATELY CONSIDERED THIS CLAIM IN THE LIGHT OF VARIOUS PROVISIONS OF TH E AGREEMENT. FOLLOWING OBSERVATIONS OF THE CIT(A) IS WORTH MENTIONING HERE: '4.1. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, REASONING OF THE ASSESSING OFFICER AND THE SUBMISSI ONS OF THE ID. AUTHORISED REPRESENTATIVE OF THE APPELLA NT. THE SO-CALLED TENANCY IS IN FACT OWNERSHIP OF BUSIN ESS PREMISES ACQUIRED BY THE APPELLANT. THIS IS EVIDENT FROM THE FOLLOWING FACTS: A) FROM A CAREFUL READING OF THE AGREEMENT DTD 10 TH OCTOBER, 2005, IT IS CLEAR THAT THE APPELLANT HAS ACQUIRED THE RIGHTS OF THE BUSINESS PREMISES IN PERPETUITY B) ALSO THE APPELLANT HAS FULL CONTROL OVER THE PROPE RTY AS THE LANDLORDS ARE PREVENTED FROM CREATING ANY TENANCY, LEAVE AND LICENSE AND ALSO NOT TO ENTER IN TO ANY AGREEMENT WHICH MAY ADVERSELY AFFECT THE TENANCY RIGHTS OF THE TENANT. THE LANDLORD IS ALSO PREVENTED FROM SELLING THE PREMISES. NO KIND OF ENCUMBRANCES CAN BE CREATED BY THE LANDLORD. THE RELEVANT PARA OF THE AGREEMENT READS AS UNDER (PG. 15 OF THE COMP.) '6(X) THE PROSPECTIVE LANDLORDS AGREE AND UNDERTAKE THAT AS LONG AS THE PROSPECTIVE TENANTS ARE IN USE AND OCCUPATION OF THE SAID LICENSED PREMISES, THE PROSPECTIVE LANDLORDS SHALL NOT, CREATE ANY TENANCY , SUB TENANCY, LEASE OR LICENSE IN RESPECT OF THE SA ID PREMISES AND SHALL NOT ENTER INTO ANY AGREEMENT, ARRANGEMENT, WRITING, CONTRACT OR COMMITMENT WITH A NY PERSON OR PARTY IN RESPECT OF THE SAID PREMISES INCLUDING SALE, DEVELOPMENT, LEASE, MORTGAGE, CHARG E OR CREATE ANY ENCUMBRANCE OF ANY NATURE WHATSOEVER IN THE SAID PREMISES WHICH MAY ADVERSELY EFFECT THE TENANCY RIGHTS OF THE PROSPECTIVE TENANTS IN RESPEC T OF THE SAID PREMISES.' SHRI BURGIS KEKI DARUWALLA 8 C) THE LANDLORDS ARE ALSO NOT ALLOWED TO TERMINATE THE LEASE AGREEMENT FOR ANY REASON EXCEPT FOR THE NON PAYMENT OF MONTHLY RENT FOR A CONTINUOUS PERIOD OF SIX MONTHS. THE RELEVANT PARA OF THE SAID AGREEMENT REA DS AS UNDER (PG. 17 OF THE COMP.): '10. THE PROSPECTIVE LANDLORDS SHALL NOT BE ENTITLE D TO TERMINATE THE TENANCY OF THE PROSPECTIVE TENANTS UN DER THIS AGREEMENT FOR ANY REASON WHATSOEVER SAVE AND EXCEPT FOR NON- PAYMENT OF THE RESERVED MONTHLY REN T FOR A CONTINUOUS PERIOD OF NOT LESS THAN SIX MONTHS AND THAT TOO AFTER GIVING THE PROSPECTIVE TENANTS NOTIC E, IN WRITING OF NOT LESS THAN TWO CALENDAR MONTHS CALLIN G UPON THE PROSPECTIVE TENANTS TO MAKE PAYMENTS OF TH E RENT IN ARREARS,' D) ON GOING THROUGH THE ABOVE PARA, IT IS CLEAR THAT THE APPELLANT HAS FULL DOMINION OVER THE PROPERTY AND T HE LEASE IN PERPETUITY IS IRREVOCABLE.' WHILE ALLOWING THE CLAIM OF DEPRECIATION AT THE RAT ES APPLICABLE TO A BUILDING, THE CIT(A) HAS CONSIDERED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD, 239 ITR 775 AND THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF BHARAT EARTH MOVERS LTD. 244 ITR 547. THE OT(A) FINALLY CONCLUDE D BY OBSERVING THAT 'HERE IS A CASE OF ACQUIRING A BUSIN ESS PREMISES IN THE NAME OF TENANCY, IN THE INSTANT CAS E THE APPELLANT HAS ACQUIRED THE PROPERTY AND HAS BECOME THE VIRTUAL OWNER. HE IS ALSO THE ACTUAL USER. THEREFORE HE IS ENTITLE TO DEPRECIATION ... ', 6. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FINDINGS OF THE CIT(A) AND IN THE LIGHT OF THE FACT S OF THE CASE, IN OUR CONSIDERED OPINION NO INTERFERENCE IS CALLED FOR. WE ACCORDINGLY UPHOLD THE FINDINGS OF THE CIT (A) TO SHRI BURGIS KEKI DARUWALLA 9 THIS EXTENT. HOWEVER ON PERUSAL OF THE FACTUAL MAT RIX, WE FIND THAT THE ASSESSEE HAS TAKEN THE POSSESSION FRO M 01.05.2005 BUT THE ACTUAL TENANCY AGREEMENT WAS MAD E FROM 10.10.2005. IN OUR CONSIDERED VIEW THIS DATE I .E. 10.10.2005 SHOULD BE TAKEN AS THE DATE OF POSSESSIO N AND USAGE BY THE ASSESSEE FOR THE PURPOSE OF THE ALLOWABILITY OF DEPRECIATION. WE, THEREFORE, MODIF Y THE FINDINGS OF THE CIT(A) AND DIRECT THE AO TO ALLOW T HE CLAIM OF DEPRECIATION AS PER THE PROVISIONS OF LAW IN THE A.Y. 2006-07. 7. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWE D. 2.2. WITHOUT GOING INTO MUCH DELIBERATION, WE FIND THAT THE TRIBUNAL VIDE ORDER DATED 26/02/2015 (ITA NOS. 4564/MUM/2009 AND 7464/MUM/2010 (AY 2006-07 AND 2007-08) ALONG WITH ITA NO.4749/MUM/2009, CONSIDERE D THE ISSUE OF DEPRECIATION IN THE CASE OF ASSESSEE A ND BY FOLLOWING THE DECISION IN THE CASE OF MYSORE MINERA LS LTD. (239 ITR 775) (SC) AND BHARAT EARTH MOVERS LTD. (22 4 ITR 547) (KAR.) FOUND THAT THE ASSESSEE TOOK THE POSSES SION ON 01/05/2005 AND THE ACTUAL TENANCY AGREEMENT WAS MAD E ON 10/10/2005. THE TRIBUNAL HELD THAT 10/10/2005 SHOULD BE TAKEN AS DATE OF POSSESSION/USES BY THE ASSESSEE FOR THE PURPOSE OF ALLOWABILITY OF DEPRECI ATION. IN THE IMPUGNED APPEAL, PENALTY U/S 271(1)(C) OF THE A CT, WAS IMPOSED ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS BY CLAIMING THE DEDUCTION ON THE BASIS OF INCORRECT FACTS. TOTALITY OF FACTS CLEARL Y INDICATES SHRI BURGIS KEKI DARUWALLA 10 THAT THE LD. ASSESSING OFFICER LEVIED PENALTY ON TH E PLEA THAT TENANCY RIGHTS WERE NOT ACQUIRED ON 02/05/2005 AND FURTHER TENANCY RIGHTS ARE NOT COVERED U/S 32 OF TH E ACT FOR CLAIM OF DEPRECIATION, THUS, IT AMOUNTS TO INACCURA TE PARTICULARS. IF THE ASSESSEE DOES NOT MAKE A CLAIM THEN NO DEDUCTION MAY BE GRANTED. NON-ALLOWANCE PER SE DOE S NOT MEAN THAT THERE IS CONCEALMENT OR FURNISHING INACCU RATE PARTICULARS. IT IS ONLY AFTER NECESSARY PERMISSION S WERE OBTAINED FROM THE MUNICIPAL CORPORATION, THE ASSESS EE ENTERED INTO A FORMAL LEASE AGREEMENT. THE TOTALITY OF FACTS CLEARLY INDICATES THAT THERE WAS NOTHING WRONG IN M AKING A CLAIM BY MAKING FULL DISCLOSURE OF FACTS. THE FACT THAT THE ASSESSING OFFICER WAS NOT AGREEING WITH THE CLAIM I TSELF DOES NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE F ILED INACCURATE PARTICULARS OR CONCEALED ITS INCOME. TH E DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS LTD . 322 ITR 158 (SC) FAVOURS THE CASE OF ASSESSEE. IN VIEW OF T HIS FACT, THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF HEARING ON 24/04/2015. SD/- SD/- ( B.R.BASKARAN ) (JO GINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; ) DATED : 24/04/2015 F{X~{T? P.S/. . . SHRI BURGIS KEKI DARUWALLA 11 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. & 0% ( *+ ) / THE CIT, MUMBAI. P4. & 0% / CIT(A)- , MUMBAI 5. 2!3 .%' , *+( *' 4 , & / DR, ITAT, MUMBAI 6. 5# 6 / GUARD FILE. / BY ORDER, /2+% .% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI