TMI Blog2019 (12) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(11) of the Act and it becomes one asset and every time new asset is acquired, it is thrown into common hotchpotch i.e., block of asset on meeting the requirement of depreciation being allowable at the same rate. It is further been held that the individual asset meet their identity and become a new separate part of block of asset, insofar as calculation of depreciation is concerned. Income Tax Appellate Tribunal has held that the assessee is entitled to claim depreciation on the value of wind mills. We are in agreement with the view taken by the Income Tax Appellate Tribunal for the reasons which we have mentioned supra. Accordingly, the first substantial question of law is answered in the affirmative and in favour of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating documents were seized from the business premises of the assessee. The partners offered a sum of ₹ 32,12,00,000/- for taxation towards stock and unexplained expenditure for the year. The respondent consequent to search, filed its return of income on 05.09.2008 declaring a total income of ₹ 347,64,45,617/- after claiming deduction under Section 80G and 80IB at ₹ 1,37,50,000/- and ₹ 36,18,515/- respectively, including the additional income declared during the course of search and post search proceedings. The Assessing Authority by an order dated 30.12.2009 in respect of the assessment year 2008-09 completed the assessment by disallowing the depreciation claimed on land obtained on lease for mining, depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Appellate Tribunal ought to have appreciated that under Section 32 of the Act, the assessee was not entitled to depreciation on the wind mills which was not actually put to use and grossly erred in reversing the findings recorded by the Assessing Officer as well as Commissioner of Income Tax (Appeals). 9. On the other hand, learned Senior counsel for the assessee has invited the attention of this Court to paragraph 37 of the order passed by the Income Tax Appellate Tribunal and has submitted that lump sum rent paid for the entire period of 30 years has to be considered as revenue expenditure and the Commissioner of Income Tax (Appeals) wrongly distinguished the decision as a case of lease of factory building. Learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um Co. Ltd. supra and has taken into account the definition of block of assets as defined under Section 2(11) of the Act which reads as under: block of assets means a group of assets falling within a class of assets comprising (a) tangible assets, being buildings, machinery, plant or furniture; (b) intangible assets, being knowhow, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature, in respect of which the same percentage of depreciation is prescribed; 13. The Income Tax Appellate Tribunal has further held that prior to introduction of new concept of block of assets with effect from 01.04.1988, the depreciation used to be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion towards acquisition of lease hold right over the land has to be considered under Section 37(1) of the Act. This Court in CIT vs. HMT Ltd., 203 ITR 820 (Kar.), has held that land for acquiring the lease hold rights has nothing but rent paid in advance. The rent paid in advance was for acquiring lease hold rights over the land and such expenditure has been considered by this Court as revenue expenditure. Therefore, the lump sum rent paid for a period of 30 years for which the land is taken on rent has to be considered as revenue expenditure and therefore, the prayer of the assessee has been accepted. We do not find any infirmity with the view taken by the Income Tax Appellate Tribunal. In the result, the second substantial qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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