Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 478 - ITAT HYDERABADDepreciation u/s 32 on boundary wall and other structures - HELD THAT:- Purpose of the boundary wall is to provide protection and security to the building and other assets of the company, which are undoubtedly business assets. From the notes to financial statements in respect of the fixed assets we notice that there was an addition to the tune of Rs. 19.10 crores in respect of which the depreciation at Rs. 1.97 crores was claimed. Further it is shown in the notes on financials, as one of the significant accounting policies, that the tangible fixed assets are carried at the cost of acquisition or construction less accumulated depreciation, and the cost of tangible fixed assets includes the acquisition and installation of respective assets. It is not the case of Revenue that on the ground of non-carrying out of any business activity, the depreciation on the fixed assets was denied. Since the purpose of boundary wall is to protect the business assets like building and other fixed assets and the moment it is complete it starts serving its purpose, it cannot therefore, be said that such an asset cannot be added to the block of assets when once the installation/construction of such asset is complete. We are of the considered opinion that if the construction of boundary wall is complete during the current year, the same is eligible to be added to the block of assets and subject to the requirement of law, it is qualified for claiming depreciation. We, therefore, hold that the disallowance of depreciation cannot be sustained. Accordingly, we direct the deletion of the same Cost of acquisition of the property in respect of which long term capital gains were claimed - CIT-A held that the assessee is not entitled to claim the indexed cost of acquisition in respect of which the assessee had no right, title or interest. Learned CIT(A) accordingly, upheld the findings of the learned Assessing Officer - HELD THAT:- According to the assessee, on survey, in respect of 4 acres of land which they intended to sell, it was found that there exists only Ac. 3.33 guntas and under a compromise, the assessee got only Ac. 1.332 which the assessee sold. While computing the capital gains on the sale of this Ac. 1.332, the assessee claimed the indexed cost of acquisition in respect of all the 4 acres. According to Section 48 of the Act, while computing the capital gains on the transfer of any capital asset, the cost of acquisition of the asset and the cost of any improvement thereof shall be deducted from the full value of consideration received on such transfer of capital asset. Here, in the case on hand, such capital asset transferred is not entire 4 acres, but only Ac. 1.332. Whatever that was not sold by the assessee cannot be considered to be the asset that was transferred for consideration and, therefore, for computing the capital gains the asset in respect of which sale consideration received alone has to be considered. No infirmity in the findings of the authorities below on this aspect.
|