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2015 (5) TMI 271 - DELHI HIGH COURT

2015 (5) TMI 271 - DELHI HIGH COURT - TMI - Depreciation claim - AO disallowed claim as the assessee was unable to demonstrate that the machinery claimed to have been used by it was in fact owned or acquired by assessee for its business - assessee's contention was that the machinery was provided to sub-distributor at that site for use by the customers - Held that:- As correctly held by ITAT the assets qua which the depreciation is claimed were not purchased during this year, but in earlier y .....

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The subsequent upgradation of the software and machinery etc. though may be with the sub distributor the fact remains that the assessee's assets were also used. The impugned assets were used for the purpose of the assessee's business, therefore, depreciation is to be allowed. Also find force in the argument of ld. Counsel for the assessee that assuming worst against the assessee the assets being the part of the existing block of assets on such presumption also become assets a .....

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Tax Appellate Tribunal (ITAT). It contends that the assessee's claim for depreciation for assessment year (AY) 2009-10 was, in the circumstances of the case, wrongly permitted. The revenue's appeal against the order of the CIT(Appeals) was rejected by the impugned order. 2. The assessee provides online lottery services on behalf of Nagaland Government and for this purpose it had appointed distributors and sub-distributors. The business model, inter alia, included provision of gaming solu .....

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to the CIT (Appeals) was allowed, who took note, inter alia, of two facts i.e. for AY 2006-07 and 2007-08, depreciation had been allowed in scrutiny assessment and that for AY 2009-10, in the reply to queries under Section 133(6), one of the assessee's sub-distributors had confirmed that the machinery on the site was provided. The revenue's appeal was rejected by the ITAT. The impugned order holds as follows: "6. We have heard rival contentions and perused the material available on .....

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wnership is meaning less, therefore, we are unable to sustain the finding of the assessing officer that assets were not owned by the assessee. 6.1. Adverting to the issue about user of impugned assets towards the assessee's business of online lottery the assessee has demonstrated the use of the assets along with the sub-distributor. The subsequent upgradation of the software and machinery etc. though may be with the sub distributor the fact remains that the assessee's assets were also us .....

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