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2010 (11) TMI 111 - HC - Income TaxDepreciation claimed on the factory building - Deduction of the insurance charges - The depreciation is allowable under Section 32 of the Income-tax Act in respect of buildings, machinery, plant or furniture owned by the assessee and used for the purpose of business or profession - Held that: factory building was not used by the assessee company but by the partnership firm for the purpose of its business - The use of building was not by the assessee for the purpose of its business, we do not find any infirmity in the orders of lower authorities for declining the claim of depreciation in the hands of the assessee company in respect of factory building which was not put to use by the assessee but by the partnership firm to whom same was contributed as per the terms of partnership deed The computation of income under the head "profit and gains of business or profession" is made in accordance with the provisions of Section 29. Section 29 provides that deduction eligible u/s 30 to 43D is to be allowed while computing the business profits - The claim of depreciation on the building contributed by the assessee for the purpose of its business is to be considered u/s 32 - The assessee company has earned either in the form of share of profit or interest which is a business income of the assessee has to be computed after allowing deduction of expenditure permissible u/s 30 to 43D Section 14A stipulates for disallowance of expenditure against the exempt income - Assessee’s claim for insurance premium in respect of this building cannot also be allowed against interest income - Only interest expenditure incurred on the amount borrowed for the purpose of contributing funds in the form of capital in partnership firm can be allowed against the interest income received from partnership firm on the credit balance of capital - Appeal is dismissed in favour of Revenue
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