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2019 (8) TMI 539 - AT - Income TaxDeemed dividend u/s 2(22)(e) - HELD THAT:- As detailed debits and credits in the three companies have already been reproduced by the CIT(A) in the order. We find merit in the submission of the ld. counsel that provisions of section 2(22)(e) of the IT Act will be attracted only if the net balance is an advance to the assessee when he is maintaining three separate accounts with the same company. Since in the instant case it is an undisputed fact that the assessee is maintaining three accounts with the said company and the cumulative balance is advance given by the assessee to the company and not advance received by the assessee from the said company, therefore, the provisions of section 2(22)(e) of the IT Act are not applicable.S et aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised by the assessee on this issue are accordingly allowed. Disallowance of depreciation on vehicle - as per AO assessee has not used the vehicle or the telephone for the purpose of his business. He, therefore, rejected the claim of depreciation - HELD THAT:- It is the submission of the ld. counsel for the assessee that when the assets have already been entered into the block of assets, therefore, use of individual asset is not necessary and, therefore, the Assessing Officer or the CIT(A) are not justified in disallowing the depreciation. I find merit in the above argument of the ld. counsel for the assessee. As held by the Hon'ble Delhi High Court in CIT vs. Bharat Aluminium Co. Ltd. [2010 (8) TMI 26 - DELHI HIGH COURT] as relied on by the ld. counsel for the assessee that though as per section 32(1), in order to be entitled to claim depreciation, asset is to be owned by assessee and it is also to be used for purpose of business or profession, but expression ‘used for the purpose of business’, when applied to block of assets, would mean use of block of assets and not any specific building, machinery, plant or furniture in said block of assets as individual assets lose their identity after becoming inseparable part of block of assets. The various other decisions relied on by the ld. counsel for the assessee and placed in the paper book also support his case. Since there is no dispute to the fact of the instance case that the vehicle and telephone instruments are already into the block of assets, therefore, the expression ‘used for the purpose of business’ would mean use of block of assets and not any specific asset of the block during the year as individual assets lose their identity after becoming inseparable part of block of assets. I, therefore, set aside the order of the CIT(A) and direct the Assessing Officer to delete the disallowance of depreciation made. The second issue raised by the assessee in the grounds of appeal is allowed.
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