TMI Blog2010 (12) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... under the disinvestment policy. The assessee has paid certain amounts which were accepted as part of purchase consideration. The payment of purchase consideration was made to different people having regard to the liabilities of the erstwhile ITDC which was the owner. In fact it could not have had a perfect title to the property which it had purchased, had it not got these things regularized from NDMC by payment of the sums in question - The payments made for perfecting the title or ownership of the business asset represent the expenditure for the purpose of the business and the assessee has rightly capitalized the sums in question which also represent as a part of purchase consideration of the asset. Excessive depreciation claimed in respect of UPS and printers - AO classified the same as part of general machinery and allowed 25 per cent per annum instead of 60 per cent claimed by the assessee - HELD THAT:- The issue is now concluded by the decision of Delhi High Court in COMMISSIONER OF INCOME TAX VERSUS BSES YAMUNA POWERS LLD. / BSES RAJDHANI POWERS LTD. [ 2010 (8) TMI 58 - DELHI HIGH COURT] wherein their Lordships have agreed with the view of the Tribunal and expressed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s nature of business it cannot be said that the landscaping done by the assessee cannot be considered as a building. After all the assessee has given a better look to this building by provision of this landscaping which has become an integral part of the building to be used as a hotel - The CIT(A) has correctly applied the principle laid down in DELHI AIRPORT SERVICE. [ 2001 (9) TMI 39 - DELHI HIGH COURT] and also the decision of GWALIOR RAYON SILK MANUFACTURING CO. LIMITED [ 1992 (4) TMI 3 - SUPREME COURT] and the decision of SOUTHERN PETRO CHEMICAL INDUSTRIES CORPORATION LIMITED [ 1998 (6) TMI 85 - MADRAS HIGH COURT] to give an extended and more meaningful definition of the term building - this view is thus agreed upon. Addition made on account of the liabilities - AO went through the balance sheet and found that certain constant amounts were outstanding from the assessee for more than 3 years and are being carried forward as a liability from year to year and there has been no transaction during the year - HELD THAT:- There are no material to come to a view that the liabilities in question have ceased to exist on the date of the balance sheet. Merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of disinvestments of Hotel Kanishka owned by ITDC and these amounts were paid for regularization of procedural lapses and only after payment of these amounts completion certificate of hotel was issued by NDMC. The ex facto sanction obtained by the assessee showed that there was no breach of a provision against public policy and the acceptance of compensation could not be for any illegal act against the public policy. The CIT(A) accepted the contention of the assessee and the Revenue is aggrieved. 6. The learned Departmental Representative strongly relied upon the evidence in the assessment order and pointed out the payment or the damages paid to NDMC for unauthorized construction does not make any difference if the unauthorized constructions were carried out by ITDC prior to taking over by the company. The payments, according to the learned Departmental Representative were clearly for indulging unauthorized constructions and are not to be allowed. 7. The learned assessee s counsel, on the other hand, submitted that the company had acquired hotel from ITDC in the disinvestment policy of the Government of India. The assessee s bid for Rs. 95,95,01,000 was accepted by the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso represent as a part of purchase consideration of the asset. In the light of the principle laid down by the jurisdictional High Court, we decline to interfere. 9. The next common dispute in these appeals relates to the claim of excessive depreciation claimed in respect of UPS and printers. The assessee purchased the UPS and printers and claimed these items to be a part of computer and claimed higher rate of depreciation at 60 per cent. The AO classified the same as part of general machinery and allowed 25 per cent per annum instead of 60 per cent claimed by the assessee. 10. We have heard both the parties on the issue and find that the issue is now concluded by the decision of Delhi High Court in CIT v. BSES Yamuna Powers Ltd. (IT Appeal No. 1267 of 2010, dt. 31st Aug., 2010) wherein their Lordships have agreed with the view of the Tribunal and expressed that computer accessories and peripherals, such as printers, scanners and server, etc. form an integral part of the computer system. In fact, the computer system cannot be used in isolation or without the computer accessories and peripherals. Accordingly, the High Court upheld the assessee s claim for higher rate of deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction. 13. The Revenue is aggrieved and the learned Departmental Representative vehemently supported the findings of the AO in the light of the Supreme Court decision in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. (supra). 14. The learned counsel for the assessee, on the other hand, strongly relied upon the discussions in the order of the CIT(A) and has relied upon the decision of the Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd. (supra) which is directly on the facts of this case and according to him, there is no dispute as to the fact that the FDRs are inextricably linked with the bank guarantees and the letter of credit which were obtained in connection with the renovation of the hotel business and the interest is treated as a part of cost of construction. 15. We have carefully gone through the records and the discussions in the impugned orders and respectfully following the decision of the jurisdictional High Court in the case of Indian Oil Panipat Power Consortium Ltd. (supra), wherein their Lordships have clearly laid down the principle that when interest earned is inextricably linked with the setting up of the plant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by the assessee cannot be considered as a building. After all the assessee has given a better look to this building by provision of this landscaping which has become an integral part of the building to be used as a hotel. In order to acquire a star category, all these artistic looks are very much necessary. The CIT(A), in our view, has correctly applied the principle laid down by the jurisdictional High Court in the case of CIT v. Delhi Airport Service [2001] 170 CTR (Del) 534 : [2002] 255 ITR 91 (Del) and also the decision of the Supreme Court in CIT v. Gwalior Rayon Silk Manufacturing Co. Ltd. [1992] 104 CTR (SC) 243 : [1992] 196 ITR 149 (SC) and the decision of the Madras High Court in CIT v. Southern Petro Chemical Industrial Corporation Ltd. [1999] 151 CTR (Mad) 188 : [1998] 233 ITR 391 (Mad) to give an extended and more meaningful definition of the term building . We agree with his view and decline to interfere on this aspect of the matter. Moreover it must be appreciated that the Revenue has accepted the order of the CIT(A) for the asst. yr. 2006-07 and it has only challenged that issue in the asst. yr. 2007-08 which is second year which is the year of consequence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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