TMI Blog2014 (2) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... on, means only the superstructure constructed on the land and does not include land - the action of the AO in allocating the cost of acquisition of the immovable property between that of land and the superstructure and allowing depreciation only in respect of the cost of the superstructure is rightly upheld –Decided against Assessee. Disallowance of salary paid to employees – Held that:- The findings of the CIT(A) upheld that no explanation has been furnished as to why the vouchers even for the one month were not signed by the three employees - The assessee had obviously employed more persons than the aforesaid three employees and the other employees could have carried out the work stated to be done by these three employees - There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be allowed only for the value of the building and not for the land. He asked the assessee to give the value of the land in the property purchased. As per the details of the circle rates submitted by assessee, the value of the land worked out to Rs.5,00, 570/-. The AO, therefore, held that Rs.30,000/- represented the value of the building and not for the land. He asked the assessee to give the vale of the land in the property purchased. As per the details of the circle rates submitted by assessee, the value of the land worked out to Rs.5,00,750/-. The AO, therefore, held that Rs.30,000/- represented the value of the building and he allowed depreciation of Rs.3,000/- only. The balance claim of depreciation was disallowed. 3. The Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation should be allowed only after making such allocation, on the value of the building so determined. Depreciation is allowed as a charge on the profits of the business as it is consumed over a period of time and adds to the cost of the business conducted by the assessee, whereas the land does not depreciate over time and is always available to the assessee. This is more true when the assessee is the sole owner of the building over the land on which the building is constructed, as opposed to the situation where multiple units are constructed on a piece of land, and each unit is sold to different persons. In the case of CI vs. Alps Theatre 67 ITR 377 (SC) the Hon'ble Supreme Court have held that building, for the purpose of depreciation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vouchers in respect of Deepak, Hitesh and Prince were unsigned. The amount of salary debited in their names was Rs.1,38,000/-. When this fact was confronted to the assessee, he stated that the salary had been paid to these persons but he was not able to produce any evidence for the same. Hence, the AO disallowed the expenditure on salary amounting to Rs.1,38,000/- and added this amount to the total income. 8. The Ld. CIT(A) confirmed the action of the Assessing Officer. 9. The Ld. counsel for the assessee, argued that the salary for one month was not got signed from the said employees due to oversight, whereas the vouchers were got signed and produced before the AO. Therefore, by all means, the salary has been paid to the said employe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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