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2013 (3) TMI 434 - AT - Income TaxDepreciation disallowed on medical instruments given on lease - Held that:- Assessee claimed depreciation on C.T. Scan machine and Angio machine were claimed in last two years as these machinery were leased out to Biva Park Radiology Pvt. Ltd. and earning lease rentals from last two years but during April, 2003 due to internal problem the lessee company temporarily closed their business and after two years, it again started the business and assessee got rental income. No doubt, according to assessee, during this year, these assets were leased out but actually lessee company was unable to use due to closure of business but that does not mean that assessee is not entitled for depreciation. The word 'used' would include actual use or at least keep ready for use which would mean that non-user even for temporary period qualifies for being treated as 'user', which embraces 'passive' user. Regarding depreciation of flat no. 1(4WA) and 111(5E) assessee is providing hospitality in these two flats to the customers of assessee for its business and it has provided guest house facility. The assessee has filed copies of lease agreement between assessee and Biva Park Radiology Pvt. Ltd. for lease of medical instruments and appliances. The assessee has also filed copy of lease agreement received in respect of medical instruments and appliances during the year ending on 31.03.2001, 31.03.2002, 31.03.2003, 31.03.2006 and 31.03.2007. From the above, it is clear that the assessee has put to use i.e. passive use of the medical equipments and also the flats were put to use for the business purposes as the same were used for company's business as guest house - thus the depreciation could have been allowed - in favour of assessee.
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