TMI Blog2016 (1) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs arrived at by the CIT(A) that only 10% area was let out by the assessee to its associated concerns for administrative work whereas the remaining area was being used by it. Thus, depreciation only to the extent of 1/10th was disallowed. No error was pointed out by the learned counsel for the revenue in the findings recorded by the CIT(A) as well as the Tribunal. - Decided on favour of assessee in part. - ITA No. 214 of 2010 - - - Dated:- 21-9-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN, JJ. For The Appellant : Mr. Tajender K.Joshi, Advocate For The Respondent : Ms. Radhika Suri, Sr. Advocate with Ms.Rajni Pal, Advocate Ajay Kumar Mittal,J. 1. The revenue has preferred this appeal under Section 260A of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case, the findings recorded by the learned ITAT are perverse and contrary to the evidence available on record as disallowance of ₹ 14,23,431/- on account of depreciation on let out building was made by the Assessing Officer as the assessee had failed to adduce, any rent agreement, the portions of building let out and used for purposes of business as claimed by assessee was not verifiable and without giving an opportunity of being heard for necessary verification by the Assessing Officer decided the issue? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. On 29.11.2000, the assessee filed return declaring income of ₹ 64,21,635/- which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and II, while considering identical question, a Division Bench of this Court in Commissioner of Income Tax vs. Rai Agro Industries Limited, (2011) 334 ITR 122 following the decision of the Apex Court in Alom Extrusions Limited's case (supra) held as under:- 5. The point for determination in this appeal is, whether the amendment made by Finance Act, 2003, effective from 1.4.2004 whereby second proviso to Section 43B stands omitted would govern the earlier cases from 1.4.1988 also. 6. It would be appropriate to delve into brief legislative history and the purpose of enacting the provisions of Section 43B of the Act before embarking on the adjudication of the controversy involved in the present appeal. 7. Section 43B provides fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation before clause (va) of sub-section (1) of section 36. The Finance Act, 2003 effective from 1.4.2004 made an amendment whereby second proviso to Section 43B of the Act was omitted from the statute book. The issue relating to retrospective operation of omission of second proviso to Section 43B of the Act was considered by the Supreme Court in Commissioner of Income Tax v. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC) wherein it was held that it is curative in nature and would apply retrospectively, with effect from,Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation as the rest of the building was clearly the factory premises out of the said rented building. Therefore, 1/10th of ₹ 14,23,431/- came to ₹ 1,42,343/- and the balance disallowance of ₹ 12,81,088/- was deleted. The CIT(A) in para 5.2. of its order recorded as under:- 5.2. I have carefully considered the submissions of the learned AR and perused the assessment orders where the matter has been discussed in para 3 to 7 and the learned AR's arguments appeared at page 13 of the paper book vide letter addressed to the ACIT, Range II, Faridabad, on this point from pages 13 to 19 of the said paper book. During the discussions with the learned AR, he has left the matter regarding the treatment of income from busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns and offered as business income. In the course of assessment proceedings, AO asked about the extent of building let out. Assessee by a chart submitted the same which is part of the record. AO without asking further questions, by mistake held that 10% is utilized by the assessee and 90% is let out besides the rental income was treated under the head business income. Assessee preferred first appeal where correct position was explained to CIT(A), who on proper verification corrected the issue of depreciation by holding that10% area was let out and thereby depreciation to this extent was disallowed: xx xxx xxx xx xx xx xx 8. We have heard the rival contentions and perused the material on record. From the perusal of the paper book,it em ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
