Fredun E. Devitre, Mumbai vs Department Of Income Tax

सव ौी वजय पाल राव, याियक सदःय एवं नरे ि कुमार ब#लै%या, लेखा सदःय के सम'

BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND

SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

आयकर अपील सं./I.T.A. No.5278/M/2013 िनधा रण वष / Assessment (िनधा Year : 2010-11 The ACIT-11(2), बनाम/ बनाम Shri Fredun E. Devitre, Aayakar Bhavan, 20, St. Martins Road, Vs. Mumbai-400 020 Bandra(W), Mumbai-400 050 ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AACPD 5697C (अपीलाथ+ /Appellant) .. (ू-यथ+ / Respondent) अपीलाथ+ ओर से/ Appellant by: Shri Sachchidanand Dubey

ू-यथ+ क/ ओर से/Respondent by: Shri J.D. Mistry

सुनवाई क/ तार1ख / Date of Hearing :19.02.2015 घोषणा क/ तार1ख /Date of Pronouncement :25.02.2015

आदे श / O R D E R

PER N.K. BILLAIYA, AM:

This appeal by the Revenue is preferred against the order of the Ld. CIT(A)-3, Mumbai dt. 21.5.2013 pertaining to assessment year 2010-11.

2. The sole grievance of the Revenue is that the Ld. CIT(A) erred in deleting the disallowance of depreciation amounting to Rs. 33,16,642/-.

2 ITA No. 5278/M/13 2.1. The assessee is an advocate by profession. The return of income was filed on 29.9.2010 declaring total income of Rs. 4,44,09,810/-. The return was selected for scrutiny under CASS. Accordingly, statutory notices were issued and served upon the assessee.

2.2. During the course of the assessment proceedings, the Assessing Officer noticed that the assessee has claimed depreciation of Rs. 33,16,642/- on office premise. The assessee was asked to furnish electricity bills, water bill and municipal tax receipt or telephone bills to prove that premises have been put to use. The assessee filed a detailed reply dt. 30.10.2012 stating that he has purchased office premise vide Deed of Transfer dt. 24.9.2009. The possession was taken on the same day i.e. 24.9.2009. Letter of possession issued by the transferor was filed with the AO. It was further explained that the assessee has also paid electricity charges for the period 22.9.2009 to 20.11.2009. The submissions made by the assessee did not find any favour with the AO who disbelieve that the assessee could be in a position to take possession on 24.9.2009 which is also the date of the transfer of the property. The AO further observed that the electricity bills submitted by the assessee are in the name of Shri A.L. Sanghavi. The AO further observed that even the society has referred to the approval of the transfer by Managing Committee on 6.11.2009 even the splitted share certificate issued by society are dt. 23.12.2009. The AO finally concluded by stating that the assessee has nothing to prove that premises have put to use. The AO proceeded by disallowing the claim of depreciation amounting to Rs. 33,16,624/-.

3. The assessee carried the matter before the Ld. CIT(A) and reiterated his claim and submitted related documents to substantiate the 3 ITA No. 5278/M/13

claim that premises have actually used by the assessee and therefore the claim of depreciation is valid. After considering the facts and the submissions, the Ld. CIT(A) observed that the assessee has taken possession on 24.9.2009 and has paid electricity charges. The Ld. CIT(A) further observed that the AO has not brought on record to prove that the assessee has not used the said premises for more than 180 days. The Ld. CIT(A) was convinced that even if the premises are used for one day, the assessee is entitled for full depreciation. After being convinced on the facts of the case, the Ld. CIT(A) deleted the disallowance of the depreciation made by the AO.

4. Aggrieved by this, the Revenue is before us.

5. The Ld. Departmental Representative strongly supported the findings of the AO.

6. The Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities.

7. We have carefully considered the orders of the authorities below. The undisputed fact is that the assessee had purchased office premises vide Transfer Deed dt. 24.9.2009. It is also an undisputed fact that the letter of possession which was issued by the transferor is dt. 24.9.2009. The AO is of the opinion that a person could not have taken possession immediately on the date of transfer, it has to be understood here that the premises are not akin to any plant and machinery. In case of plant and machinery, depreciation could be allowed, when the plant and machinery commences its operation after installation, which means that plant and machinery are used when they commence their operation. Thus, there can be a time gap between the possession of plant and machinery and 4 ITA No. 5278/M/13

their usage. However, in the case of office premises, which is to be used for practicing the profession of advocacy, there is no question of any time gap between the possession of the office premises and the commencement of the operation because for practicing the profession of advocacy all that is required is a table and chair. Thus, an advocate can commence his profession immediately after taking possession of the premises. Further, payment of electricity bill is not in dispute. The name has been transferred by the society. All these facts go to prove that the claim of depreciation is as per the provisions of law and therefore, we do not find any reason to interfere with the findings of the Ld. CIT(A).

8. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 25th February, 2015

Sd/- Sd/-

(VIJAY PAL RAO ) (N.K. BILLAIYA) याियक सदःय/JUDICIAL MEMBER लेखा सदःय / ACCOUNTANT MEMBER मुंबई Mumbai; 5दनांक Dated : व.िन.स./ RJ , Sr. PS 5 ITA No. 5278/M/13

0. आदे श क/ ूितिल प अमे षत/Copy षत of the Order forwarded to : 1. अपीलाथ+ / The Appellant 2. ू-यथ+ / The Respondent. 3. आयकर आयु7(अपील) / The CIT(A)- 4. आयकर आयु7 / CIT

5. वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स-या पत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai