TMI Blog2021 (8) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... its are stated to be used for professional purposes. The assessee has claimed proportionate expenses relating to these two units. These units form part of the opening block of asset in this year. As per the scheme of the Act, under the concept of block of asset, the assets would lose individual identity and depreciation on asset is allowed on block concept notwithstanding the fact that few of the assets were not used for business / professional purposes. As long as the assets remain part of the block and are not parted with by the assessee, the same remain part of the block of asset and depreciation is allowable to the assessee. Since the depreciation on the block has been allowed to the assessee in earlier years, the same could not be denied to the assessee in this year since individual assets have lost their specific identity. The case laws as cited by Ld. CIT(A) in the impugned order support this view and are quite applicable to the facts of the case. Hence, Ld. CIT(A), in our considered opinion, has clinched the issue in correct perspective. Also as per the requirement of Sec.32, to be eligible to claim depreciation, the assessee must own the asset and the asset must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear was duly allowed to the assessee. Moreover, the assessee has already produced sufficient documentary evidences in the shape of copy of Service Tax Registration Certificate, copies of commercial contracts entered into with producers / third parties, professional fees / sales invoices raised by the assessee on third parties etc. Assessee has proved that a clearly demarcated part of the premise was used by her as the office which is duly supported by various documents on record. There is nothing on record to disprove this claim. Therefore, we are of the considered opinion that the assessee has well substantiated her claim. - Decided against revenue. - I.T.A. No.4428/Mum/2019 - - - Dated:- 29-7-2021 - Shri P. P. Bhatt, President And Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri Chetan Karia, Ld. AR For the Revenue : Dr. Shanteshwar Swami, Ld. DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income-Tax (Appeals)-4, Mumbai [CIT(A)], dated 12/04/2019 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (West), Mumbai. All the units were stated to be used as office-cum-residence for the assessee. It was submitted that a specified part thereof was used by her as office and remaining part was used for the purpose of residence. For the specified part which was being used as office, the assessee claimed deduction of expenditure as per following details: - No. Particulars Amt. (Rs.) 1. Interest on Office Loan 51.52 Lacs 2. Depreciation on office at Oberoi Heights 60.91 Lacs 3. Depreciation on furniture Fixtures at Oberoi Heights 23.80 Lacs 4. Society Charges (50%) 17.15 Lacs 5. Electricity Charges (50%) 2.36 Lacs Total 155.74 Lacs The interest on loan borrowed by assessee to acquire office premises was claimed as deduction u/s 36(1)(iii), claim of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The attention was drawn to the fact that the 6 units were acquired in AY 2012-13, the assessment of which was also framed in scrutiny assessment u/s 143(3). During the course of assessment proceedings of that year, necessary details with respect to acquisition of units were furnished along with documents. The assessee had also demonstrated the utilization of 2 units viz. 3501B 3601B for the assessee s profession. These facts as well as evidences were accepted by Ld. AO and similar expenditure including depreciation claimed in that year was duly allowed to the assessee after due verification. Therefore, Ld. AO was not justified in taking contrary view in this year. In fact, in the remand report, Ld. AO had observed that the assessee was eligible only for 10% of total expenses on the presumption that only unit no. 3501B was used for the purpose of office whose area was 10% of total area of six units. The observation was not correct since the assessee was using two units for the purpose of profession whose area was approx. 47% of total area. It was further explained that up-to financial year 2011-12, the assessee was carrying on her profession from office premises sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional fees / sales invoices raised by the assessee on third parties etc. All these documents mentioned assessee s address as unit no. 3501 3601. 5. The Ld. CIT(A) after due consideration of remand report as well as assessee s submissions noted that the assessee was a well-known choreographer and earning significant income from professional activities. The earning of such huge professional income would not be possible without any specified business place. The Ld. AO, in earlier Assessment Year had verified the details and allowed deduction of depreciation and other expenses in scrutiny assessment u/s 143(3). Further, in this year, the assessee had furnished many documentary evidences like copy of Service Tax Registration along with copies of commercial contracts and invoices which bear the address of the assessee. The assessee also furnished the photographs of office set-up. Finally, in terms of decision of this Tribunal in ACIT V/s M/s Krystal Colloids Private Ltd. (ITA No.3170/Mum/2016 dated 31/07/208), Ld. CIT(A) allowed the claim of the assessee and held that the expenses would be allowable expenditure. This decision of Mumbai Tribunal has held that once an asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new duplex apartment. The said premises were stated to be similarly used by the assessee for office-cum-residence purposes. The assessee was having 6 units out of which 2 units are stated to be used for professional purposes. The assessee has claimed proportionate expenses relating to these two units. 7. It could also be gathered that the six units were acquired by the assessee in AY 2012-13. The assessment for that year was framed by Ld. AO in scrutiny assessment u/s 143(3). Apparently, all the requisite details as to acquisition of units as well as expenditure incurred therein were called from the assessee which were supplied as well as verified by Ld. AO. The units were split into two parts viz. units which were used as residence and units which were used for the purpose of profession. The depreciation on units as well as other proportionate expenditure with respect to units which were used for professional purposes was claimed as well as allowed by Ld.AO. Thus, it is quite clear that these units form part of the opening block of asset in this year. As per the scheme of the Act, under the concept of block of asset, the assets would lose individual identity and depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be an allowable deduction u/s 36(1)(iii). We concur with these submissions. 10. Regarding Society electricity charges, the assessee submits that the unit being used as office is a multi-storeyed building being managed by a housing society. The society charges monthly compensation for providing various services. The appellant has bifurcated and claimed society charges relating to units used as office. Similarly, electricity charges relating to units used as office are claimed as deduction. The said claim is under section 37(1) which provide that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business or profession . We find that the assessee fulfils the prescribed conditions of Sec.37(1). More so, the rule of consistency would debar the Ld. AO to adopt different view, facts remaining the same. The usage of units for professional use was accepted in earlier years and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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