TMI Blog2016 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... te are reversed. Disallowance of depreciation - building was let out and the rental income from the same was claimed under the head income from house property - Held that:- As the building was let out and therefore the depreciation corresponding to that part cannot be allowed to the assessee. In subsection (2) of section 38 of the Act, it is clearly laid down that where any building is not exclusively used for the purpose of business or profession the deductions under clause (ii) of subsection (1) of section 32 shall be restricted to fair proportionate part thereof which the Assessing Officer may determine having regard to the use of such building for the purpose of business or profession. Thus in view of the clear provisions of the Act in this regard, we restore the issue to the file of the Assessing Officer and direct the Assessing officer to allow the depreciation in accordance with the provisions of section 38(2) of the Act. - ITA No. 4613/Del/2011 - - - Dated:- 30-3-2016 - Sh. H. S. Sidhu, Judicial Member And Sh. O. P. Kant, Accountant Member For the Appellant : Sh. BN Goswami, Advocate For the Respondent : Sh. Sarabjeet Singh, Senior DR ORDER Per O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not used for the purpose of business. Aggrieved with the finding of the Assessing Officer, the assessee filed appeal before the Ld. Commissioner of Income-tax( Appeals), however could not succeed on the issue of disallowance of the expenses and the depreciation. In respect of allowance of past determined losses against the income computed, the Ld. CIT(Appeal) directed the Assessing Officer to verify the record and allow the brought forward losses in accordance with the provisions of the Act. Aggrieved, the assessee is in appeal before the Tribunal. 3. In ground No. 1, the assessee has challenged both the disallowances i.e. the disallowance of expenditure of ₹ 12, 51, 610/-and disallowance of depreciation of ₹ 94,330/-. In ground No. 2 the assessee has challenged the disallowance of expenses of ₹ 12, 51, 610/-. 4. Before us, the Ld. Authorised Representative of the assessee filed a paper book containing pages from 1 to 47 and submitted that the assessee was engaged in providing services to foreign parties on commission basis for last many years and in the assessment year 2002-03, 2003-04 and 2012-13, 2014-15 has shown receipt from professional fees, tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee should have been allowed the similar expenses claimed under the head profit and gains from business or profession in the year under consideration also. The jurisdictional High Court in the case of CIT versus Dalmia Promoters Developers Private Limited (supra) has held that where there are no material change in facts in subsequent year, view taken for earlier years would continue on principle of consistency. The relevant finding of the Hon ble High Court is as under: 7. The question in the above backdrop is whether the Tribunal was justified in upholding the order passed by the CIT(A) on the principles of consistency. In Radhasoami Satsang s case (supra), the apex Court declared that although the principles of res judicata do not apply to IT proceedings, each assessment year being a unit by itself, yet in cases, where a fundamental aspect permeating through different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it may not be appropriate to allow that position to be changed in a subsequent year. Their Lordships extracted with approval the following passage from Hoyst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of a change in facts or any Addl. input there was no compelling reason for taking a different view. The CIT(A) and the Tribunal were, therefore, justified in holding that the view taken for the earlier assessment years continued to be applicable even for the year under consideration. 6. Further, from the details filed for the earlier and subsequent years, we find that the assessee was engaged in professional activity and maintained infrastructure in the form of office space and also incurred travelling expenses. It is quite possible that the assessee may not have been able to bring business or professional receipt during the year, however, he was required to maintain the office setup and other infrastructure to remain in the profession. The fact that assessee was engaged in the profession is evident from the details filed for subsequent years as the assessee has shown receipt from professional activity in assessment year 2012-13 and 2014-15. In the case of CIT versus Rajendra Prasad Moody (supra), while deciding the issue for deduction for expenses under the head income from other sources, the Hon ble court has held that what section 57(iii) requires is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. In subsection (2) of section 38 of the Act, it is clearly laid down that where any building is not exclusively used for the purpose of business or profession the deductions under clause (ii) of subsection (1) of section 32 shall be restricted to fair proportionate part thereof which the Assessing Officer may determine having regard to the use of such building for the purpose of business or profession. Thus in view of the clear provisions of the Act in this regard, we restore the issue to the file of the Assessing Officer and direct the Assessing officer to allow the depreciation in accordance with the provisions of section 38(2) of the Act. Accordingly the ground No 1 is allowed partly for statistical purpose and ground No. 2 of the appeal is allowed. 8. In ground No. 3 the assessee has agitated that the losses of the past both business and depreciation duly assessed and determined merits to be adjusted against the taxable income computed. We find that the Ld. Commissioner of Income-tax( Appeals) has already directed the Assessing Officer to verify the record and allow the brought forward losses in accordance with the provisions of the Act. Therefore in our view, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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