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2016 (6) TMI 25 - ITAT MUMBAIDisallowance of depreciation - whether price paid for purchase of flat will be taken as the cost of flats or to be bifurcated between land and flat - Held that:- In the instant case, the assessee has paid the purchase price for purchase of flats and it is not discernible from the sale deed that it has paid anything separately for land. On the contrary, the sale deed makes it very clear that what was conveyed was only the super structure of the flats. On the contrary, it is an undisputed fact that the ownership of the land has remained with the vendor till the end of the year under consideration. The conveyance deed also makes it very clear that the land shall be transferred by the vendor to a co-operative society or any other form of organization. The assessee does not have any right or say in the matter of conveyance of land. These clauses coupled with the provisions of Maharashtra Apartments Act makes it clear that the assessee shall have only right of interest in the common area and facilities. Hence we are of the view that the tax authorities are not justified in bifurcating the selling price between the land and building without bringing any material to support their view. It is an undisputed fact that the assessing officer has allowed depreciation on the flats in AY 2006-07 and 2007-08. Hence, we are of the view that it may not be proper on his part to draw adverse inferences during the instant year, on the basis of certain presumptions entertained by him, that too without bringing any material on record to support his views. On the contrary, as stated earlier the recitals made in the conveyance deed actually supports the contentions of the assessee. Thus we direct the AO to allow the depreciation as computed by the assessee taking the price paid for purchase of flat as the cost of flats. - Decided in favour of assessee.
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