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2015 (7) TMI 950 - ITAT KOLKATA

2015 (7) TMI 950 - ITAT KOLKATA - TMI - Disallowance of claim of depreciation on (i) Residential house property at 10, Mistry Manor, 62A, Napean Sea Road, Mumbai and (ii) Premises at C-6, Corianthian, 17 Off Arthur Bunder Road, Colaba, Mumbai - CIT(A) allowed claim - Held that:- D.R. even though vehemently relied on the order of the Assessing Officer but could not adduce any cogent material or evidence before us, which may compel us to reverse the finding of the CIT(Appeals). It is not denied th .....

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ome from house property under section 22 for two properties - Held that:- Since we have already confirmed the order of CIT(Appeals) that both the properties acquired by the assessee during the year were being used for the purpose of business and, therefore, the assessee was entitled for the depreciation, and no question of adding annual value as income from house property under section 22 arises. - Decided in favour of assessee.

Addition on set off of the past business losses - CIT(A) .....

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e assessee, we noted that there is no change in the shareholding pattern, the old 10 shareholders, who were having the entire share capital as on 31.03.2004 continues to hold the shares as on 31.03.2007. In the case of the assessee the change in the shareholding pattern is due to the induction of the fresh capital not due to the transfer of the shares from one shareholder to another. In view of this fact, we do not find any illegality or infirmity in the order of the CIT(Appeals). We accordingly .....

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als)-VIII, Kolkata dated 11.05.2012 for the assessment year 2007-08 by taking the following effective grounds of appeal:- 1. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of claim of depreciation of ₹ 35,21,646/- (i) Residential house property at 10, Mistry Manor, 62A, Napean Sea Road, Mumbai and (ii) Premises at C-6, Corianthian, 17 Off Arthur Bunder Road, Colaba, Mumbai." 2. "On the facts and circumstances of the .....

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the house property 10, Mistry Manor, 62A, Napean Sea Road, Mumbai and house property at C-6, Corianthian, 17 Off Arthur Bunder Road, Colaba, Mumbai, the above house properties having been used during the previous year for business activity of the assessee company." 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the A.O. to the tune of ₹ 30,67,863/- disallowed u/s. 79 relying on the Apex Court's deci .....

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laimed depreciation totalling to ₹ 35,39,663/-, out of which depreciation on building amounting to ₹ 35,21,646/- was disallowed by the Assessing Officer. When questioned, during the course of assessment the assessee made a written submission stating that the assessee s premises consist of two properties on which depreciation was claimed. The fi rst property is situated at 10, Mistry Manor, 62A, Napean Sea Road, Mumbai, which was acquired and put to use on 16.05.2006 for a total inves .....

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purposes and according to him the assessee was engaged in trading in shares and mutual funds were executed through broker and all correspondences in this regard were made with the company addressed at India Limited, Bandbox House Rear, 2nd Floor, and 254D, Dr. A.B. Road, Worly, and Mumbai. The residential address of one of the main active Di rectors of the company Mr. Ravi Krishna is at 6A, Mayfair Gardens, Little Gibbs Road, Malabar Hill, Mumbai-6 and some financial transactions of the company .....

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account relate to the registered office of the company at Kolkata. The Assessing Officer, therefore, disallowed the depreciation. The assessee went in appeal before the CIT(Appeals). CIT(Appeals) deleted the disallowance in respect of the depreciation by observing as under:- After careful consideration ·of the submission of the appellant, perusing the facts of the case including the impugned assessment order and other materials on record, this ground of appeal of the appellant is decided .....

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59 ITR 152 has held as under on page 155 of the report:- "These employees are engaged in the main business of the company and their residence in the buildings in dispute is incidental to their main occupation, that is, the carrying on of the business of the company. In true perspective, these buildings are part of the business equipment of the owner , or, in other words, it is the business asset of the owner". Similar view has been taken in following cases:- Jamshedpur Engineering and .....

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on. Accordingly A.O. is directed to allow depreciation on the said property as per the rate prescribed under Income Tax Rules, 1962. Office at C-6, Corianthian, 17 Off Arthur Bunder Road, Colaba, Mumbai i) It is not in dispute that main active director of the company Shri Ravi Krishna resides in Mumbai and some financial transaction relating to insurance and Bank are executed from his residential house situated in Mumbai . As discussed above Smt Anita Krishna the other director of the company ha .....

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he AIR submission that the company has used the property for holding business meeting etc has not been controverted by A.O. by any material evidence. v) That in the case of ACIT vs. Ashina Syntex Ltd. 251 ITR 133, the Hon'ble Gauhati has held that the expression 'used" for the purpose of business has a wider meaning. The law has not prescribed any minimum time limit for use. iii) For the above reasons I am of the considered view that the property situated at C-6, Corianthian, 17 Off .....

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t material or evidence before us, which may compel us to reverse the finding of the CIT(Appeals). It is not denied that the property No. 10, Mistry Manor, 62A, Napean Sea Road, Mumbai was allotted to Smt. Anita Krishna, Di rec tor so that she can look after business activity carried on by the assessee-company in Mumbai. Similarly in respect of property at C-6, Corianthian, 17 Off Arthur Bunder Road, Colaba, Mumbai, no evidence was brought to our knowledge by the ld. D.R. which may prove that the .....

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assessee during the year were being used for the purpose of business and, therefore, the assessee was entitled for the depreciation, and no question of adding annual value as income from house property under section 22 arises. We accordingly dismiss this ground. 6. Ground No. 4 relates to the deletion of the addition made to the tune of ₹ 30,67,863/-. The facts relating to this ground are that the assessee claimed set off of the past business losses for the assessment year 2004-05 of ͅ .....

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financial year 2004-05, but there voting power reduced to 47.25% as there was also increase of 7 new shareholders carrying 52.75% voting power. Thus the Assessing Officer was of the view that during the financial year 2004-05, there was change in shareholding. As per section 79 of the Income Tax Act, loss pertains to financial year 2003- 04 relevant to assessment year 2004-05 amounting to ₹ 30,67,863/- is not allowable to carry forward and set off against the income for the assessment year .....

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n assessment year 2004-05 remained in the list of shareholders. The year-wise increase of share capital as well as new and old shareholders are highlighted below:- No. of shareholders Share capital Old New Total F.Y. 2004-05 (A.Y. 2005-06) 10 07 17 45,65,200/- F.Y. 2005-06 (A.Y. 2006-07) 17 13 30 71,95,540/- F.Y. 2006-07 (A.Y. 2007-08) 30 NIL 30 90,71,400/- It was submitted that section 79 is applicable where there is a change in the shareholding pattern in the case of assessee. But there was no .....

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ion of the Hon ble Supreme Court in the case of CIT -vs.- Italindia Cotton Co. Pvt. Limited reported in 174 ITR 160 and that of CIT -vs.- Shri Subhulaxmi Mills Limited reported in 249 ITR 795 deleted the disallowance. According to him, there was no change in the shareholding pattern due to induction of fresh capital in the company and not due to transfer of shares from one shareholder to another. 8. We have heard the rival submissions and carefully considered the same along with the order of tax .....

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₹ 45,65,200/-. Similarly in the assessment year 2006-07 the assessee has also issued fresh shares to 13 new shareholders. When issued, subscribed capital increased to ₹ 71,95,540/-. There is no change so far the shares being held by the shareholders as on 31.03.2004. The same very shareholders holding the same capital of ₹ 20,05,200/-. The provision of section 79 lays down as under:- 79. Notwithstanding anything contained in this chapter, where a change in being a company in wh .....

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