TMI Blog2015 (6) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... in the accounts, therefore, it can never claim as business loss on sale of the office premises which is otherwise a capital asset. We do not find any error in the finding of ld. CIT(A). - Decided against assessee. Failure to deposit the PF contribution collected from the employees within the due date provided in the P.F. Act - Held that:- This issue is covered against the assessee by the decision of Hon'ble Jurisdictional High Court in the case of G.S.R.T. Corpn. reported in [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein held that if assessee fails to deposit employees' contribution within the due date provided under the P.F. Act then assessee will not be entitled for deduction. Accordingly, the ld. first appellate authority has rightly confirmed the disallowance. - Decided in favour of revenue. Lease rental income earned from the immovable property - business income OR income from house property - Held that:- The main activity of the assessee was not earning rental income rather it was an activity of trading in the flats. Rental was an incidental income. Similar are the facts of other cases. The main activity of the assessee was not the earning of rental income. The Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion dated 20th February, 2006 to purchase a car Lancer LXI Model in the name of Director. The car bearing Regn. No.GJ-1- HL-4000 was purchased in the name of Shri Suresh J. Shah, vide Bill No.00065 dated 3.3.2006. The cost of the case along with Accessories was ₹ 8,06,656/-. The assessee claimed depreciation on the car which has been disallowed by the AO in both the years stating that the company is not the registered owner of the car. 4. Appeal to the CIT(A) did not bring any relief to the assessee. 5. We have duly considered the rival contentions and gone through the record carefully. On page nos.2 to 12-A of the Paper Book, assessee has placed on record schedule of asset, declaration from Shri Suresh Jadavji Shah deposing therein that he has no right, title of interest in his personal capacity over the said car. The resolution of the Board is available on page 6 and the invoice of the car is available on page 7. Repayments of loan are available on pages 8 to 10. The company has repaid the loan. The Director has categorically declared that he has no personal right, title or interest over the car. Thus for all practical purposes the car was owned by the company. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is in the business of real estate. It has purchased properties and sold them. It is also earning rental income as business income. Rentals earned from these properties were also offered as business income. The assessee has not claimed any depreciation on the same because it was stock-in-trade. 11. On the other hand, the ld. DR relied upon the orders of revenue authorities below. 12. We have duly considered the rival contentions and gone through the record carefully. The ld. first appellate authority has made a lucid enunciation of law and facts. The finding recorded in paragraph 3.3 on this issue is worth to note. It reads as under :- ''3.3. I have considered the facts of the case, assessment order and appellant's submission. Appellant sold basement office building during the year on which loss was claimed as revenue. The said office premise was shown as capital work in progress in fixed assets in the balance sheet. It is not in dispute that the said asset was not shown as stock in trade in the accounts to claim that it was business asset and not capital asset. Since asset was not stock in trade but capital work in progress the loss on sale of the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record that assessee has deposited employees' contribution of ₹ 29,272/- in the PF account after 5 days of the due date provided under the PF Act. The ld. counsel for the assessee contended that this issue is covered against the assessee by the decision of Hon'ble Jurisdictional High Court in the case of G.S.R.T. Corpn. reported in 366 ITR 170. Hon'ble Gujarat High Court has held that if assessee fails to deposit employees' contribution within the due date provided under the P.F. Act then assessee will not be entitled for deduction. Accordingly, the ld. first appellate authority has rightly confirmed the disallowance. This ground of appeal is rejected. 16. Ground Nos. 3 to 5 are inter connected with each other. In these grounds of appeal assessee has pleaded that ld. CIT(A) has erred in confirming the disallowance of depreciation of ₹ 13,11,225/- out of depreciation claimed on the buildings. The assessee further pleaded that CIT(A) has erred in holding that lease rental income earned from the immovable property and shown as business income is to be assessed as ''income from house property''. The CIT(A) further erred in directing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FF01, FF01A, FF03, FF10, GF01, GF01A, GF03, GF10. The contention of the assessee was that all the flats were purchased in one lot. They were ready to use. Some of the flats have actually been leased out and lease rental income has resulted to the assessee. As far as the remaining flats are concerned the passive user for the purpose of the business has been established. Because they were also ready for leasing out. Somehow the prospective tenants were not available. The other addition to the property relates to Eternia Complex. The assessee has purchased 8 units on 31st March, 2007. None of the unit was leased out. 20. The stand of the ld. DR on the other hand was, that the income from these properties are to be assessed under the head ''house property income'' and no depreciation can be granted to the assessee. It is stated that specific deduction is available under section 24 of the I.T. Act. 21. The ld. counsel for the assessee further contended that CIT(A) has erred in observing that the rental income can never be assessed under the head 'house property income' He relied upon the judgement of Hon'ble Allahabad High Court in the case of CIT-1 vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation is concerned we find that the Ajarmar Flats were purchased by the assessee before 30th September, 2006. Out of 17 flats, 9 flats were actually let out, exhibiting the fact that the asset was ready for use in the business. It is construed that assets were used passively for the purpose of business and, therefore, depreciation is admissible to the assessee. We direct the AO to grant depreciation on the value of these flats. The ld. AO shall carry out this exercise after providing opportunity to the assessee. 24. As far as the properties purchased at Eternia Complex is concerned, these purchases were made on 31st March, 2007 i.e. last day of accounting year and the assessee could not bring any evidence on the record demonstrating that these flats were ready for use or giving them on rent. There is no evidence of this on record. Thus there cannot be any passive user of these flats. The assessee is not entitled for depreciation on these assets. We confirm the view of AO on this point. Accordingly this issue is partly allowed. 25. In the result, both the appeals of assessee are partly allowed. Order pronounced in the open Court on 29.5.2015. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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