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2015 (4) TMI 293 - AT - Income TaxDisallowance of guest house expenses u/s 37(4)- Held that:- This issue has been decided against the assessee by the Hon’ble Supreme Court in the case of Britannia Industries Ltd. [2005 (10) TMI 30 - SUPREME Court] - Decided against assessee. Disallowance of depreciation on assets leased to REPL - As a sequel of the search operation, conducted by Investigation Directorate in the case of REPL group establishing non-existence of assets and bogus lease transactions entered by the group, the AO disallowed the claim of depreciation on assets leased to REPL - As per assessee proper course of action should be under section 158BD and, therefore, the additions/disallowance made by the AO is bad in law - Held that:- We are inclined to hold that if the department proposed to make an assessment based on searched material, then the course available to it was to proceed as per the provisions of Chapter XIV-B i.e. sec. 158BD read with sec. 158BC of the Act and not u/s 143(3). In case of search material, the same is to be assessed by way of block assessment under Chapter XIV-B. Thus the impugned addition cannot be made in the hands of the assessee on protective basis by taking recourse to sec. 143(3). Thus we set aside the order of Ld. CIT(A) and direct the AO to delete the addition on account of depreciation. See case of Kapil Dev [2012 (3) TMI 397 - ITAT DELHI] - Decided in favour of assessee. Disallowance of depreciation on leased assets to AEL - Held that:- As relying on I.C.D.S Ltd. vs. CIT [2013 (1) TMI 344 - SUPREME COURT ] wherein held that as the entire lease rent received by the assessee is assessed as business income in its hands and the entire lease rent paid by the lessee has been treated as deductible revenue expenditure in the hands of the lessee. This reaffirms the position that lessor i.e. the assessee is the owner of the vehicles. As the owner, it used the assets in the course of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out. - Decided in favour of assessee. Addition of broken period interest - CIT(A) deleted the addition - Held that:- As decided in assessee's own case [2014 (8) TMI 119 - BOMBAY HIGH COURT] addition of broken period interest need to be deleted as relying on American Express International Banking Corporation v/s Commissioner of Income Tax [2002 (9) TMI 96 - BOMBAY High Court] - Decided against revenue.
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