Chandulal Surajmal, Mumbai vs Assessee
- CitationI.T.A. No.4582/Mum/2013
Ratio decidendi
The rule this decision rests on
Depreciation under the Income Tax Act is not allowable on land, so where the assessee claims depreciation on a windmill cost that includes an amount described as cost of land, the amount is disallowed as land cost unless the assessee substantiates that it is in fact part of the depreciable cost of the asset. Where the break-up of the asset cost separately discloses the civil construction expenditure, and the assessee cannot furnish material to show that a separately stated land-cost amount in fact represents civil construction work, the taxing authorities are justified in treating that amount as cost of land and in disallowing depreciation on it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य
आयकर अपील सं./I.T.A. No.4582/Mum/2013 ( नधारण वष / Assessment Year :2008-09)
M/s Chandulal Surajmal, बनाम/ Joint Commissioner of Income Tax Bombay Cotton Mill Compound Vs. Range 17(3), or CIT City 17, Kalachowky Road, 5th floor, Mumbai-400033 Piramal Chambers, Lalbaug, Mumbai. (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AAAFC0327Q
अपीलाथ ओर से / Assessee by : Shri N R Agarwal यथ क ओर से/Respondent by : Shri Neil Phlip.
सन ु वाई क तार ख / Date of Hearing : 1.1.2015 घोषणा क तार ख /Date of Pronouncement : 07.1.2015
आदे श / O R D E R Per B.R.BASKARAN, Accountant Member:
The assessee has filed this appeal challenging the order dated 12.3.2013
passed by ld. CIT(A)-16 and it relates to the assessment year 2008-09.
2. The assessee is aggrieved by the decision of ld. CIT(A) in confirming the
disallowance of depreciation of Rs.5,32,689/-.
3. We heard the parties and perused the record. We notice from the record
that the assessee has claimed depreciation on windmill purchased by it. During
the course of assessment proceeding, the AO examined the break-up details of
windmill cost and noticed that the same included the "cost of land" of 2 ITA No.4582/M/13
Rs.6,40,000/-. Since depreciation is not allowable on land, the AO disallowed
depreciation claimed by the assessee on land. The ld. CIT(A) also confirmed the
said disallowance.
4. At the time of hearing, the ld.counsel submitted that the cost of land
mentioned in the break-up details actually pertains to civil construction
expenditure incurred towards foundation work etc. Accordingly, he submitted
that the same should be considered as cost of windmill and depreciation should
be allowed on it. However, on perusal of break-up details of windmill cost given
in para 4 of the assessment order, we notice that the civil construction cost of
Rs.29,17,473/- has been separately disclosed. When this fact was pointed out
to the ld.Counsel, he could give convincing explanation, but still claimed that cost
of land of Rs.6,40,000/- also pertains to civil construction work only. It is
pertinent to note that he could not furnish any material to support his claim.
Since, the cost of civil construction is separately disclosed in the break up details,
we are of the view that the taxing authorities are justified in holding that the
amount of Rs.6,40,000/- pertains to cost of land only. Since no depreciation is
allowable on cost of land, we are of the view that the ld CIT(A) was justified in
confirming the disallowance of depreciation made by the assessing officer.
5. In the result, the appeal filed by the assessee is dismissed.
The above order was pronounced in the open court on 7th Jan, 2015.
घोषणा खल ु े यायालय म दनांकः 7th Jan, 2015 को क गई ।
sd sd
(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: 7th Jan, 2015.
व. न.स./ SRL , Sr. PS 3 ITA No.4582/M/13
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ंु ई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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