TMI Blog2022 (12) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfilled as assessee is not the owner of the asset and the asset is not used for the purpose of business or profession of the owner, which is the sister concern but was used for the purpose of business of the appellant which was not the owner Merely entering into an agreement or understanding of user of a asset, a License may be created in favour of user, however, that does not vest the user with the interest of any nature akin to owner for the purpose of Section 32(1) of the Act. So also no claim of depreciation beyond the law is allowable on mutual understanding between the owner and the user. The grounds raised have no substance. The appeal of assessee is dismissed. - ITA No. 9825/Del/2019 - - - Dated:- 21-12-2022 - SH. SHAMIM YAHYA , ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA , JUDICIAL MEMBER Assessee by : Sh. R.K.Kapoor , CA Revenue by : Sh. Sunil Kumar Yadav , Sr. DR ORDER PER ANUBHAV SHARMA , JM : The appeal has been filed by the Assessee against order dated 21.10.2019 passed in appeal no. 10447/18-19 for assessment year 2016-17, by the Commissioner of Income Tax (Appeals)-2, New Delhi (hereinafter referred to as the First Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were held jointly between the two aforementioned entities was denied by the assessee. Eventually, this fact was admitted by the assessee in their letter dated 27.12.2018. 3.2 However, no evidence has been brought forth by the assessee to show that the depreciation has not been claimed twice. There are no details of which assets were purchased and used jointly. In absence of any evidence to believe otherwise, it is assumed that the assets were owned jointly by the assessee and M/s Carlson Hotels (South Asia) Pvt. Ltd. in equal proportion. As a result, half of the depreciation claimed as expense in the Return of Income, that is, Rs. 4,82,865/- (50% of Rs. 9,65,729/-) is hereby disallowed and added back to the income of the assessee. (Addition Rs. 4,82,865/-) 3. In appeal the assessee filed a written submission along with paper book and additional evidence in the form of lease agreement for sharing of premises, list of assets purchased by the assessee and agreement with sister concern for sharing of expenses on premises and fix assets. The same were made subject of remand report from ld. AO and were admitted under Rule 46A by the Ld. CIT(A) and Ld. CIT(A) was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shared basis of area occupied by both the entities; and b) By not appreciating that the cost of the fixed assets capitalized in the books of assessee was in the proportion of ownership warranting no further disallowance. c) By not appreciating that on facts claim of depreciation has been correctly computed only on the proportionate share of assets capitalized in assessee s books of accounts. 4) That the Ld. AO/CIT(A) has failed to consider the lease agreement and misinterpreted the law by holding that 100 % depreciation shall be allowed to the other co owner of the assets which has also claimed only proportionate claim. 5) That the addition made of disallowance of 50% of total depreciation is adhoc and irrational, and is based on conjectures surmises accordingly, is prayed to be deleted. 6) The charging of interest u/s 234D is bad in law and is prayed to be deleted. 7) That the penalty proceedings-initiated u/s Sec 271(l)(c) are on wholly illegal and untenable grounds since there is no furnishing of inaccurate particulars of income, by the assessee. 8) The aforesaid grounds of appeal are without prejudice to one another. 9) The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee/ appellant also in para no. 8.7 of order of Ld. CIT(A). 8. Further, it can be observed that assessee does not dispute the fact that only one asset is the subject matter of dispute and the same was purchased by sister concern. The invoice is in the favour of the sister concern thus, the defacto and de-jure owner happens to be the sister concern. Merely because it has allowed to be share it to the sister concern, the assessee/ appellant, that does not give any right, title or interest in the nature of ownership to the assessee so as to be entitled for claim of depreciation u/s 32 of the Act. Said section provides that to claim depreciation assessee should be the owner of the asset and the asset must be used for the purposes of business or profession. Here in the case in hand both the requirements are not fulfilled as assessee is not the owner of the asset and the asset is not used for the purpose of business or profession of the owner, which is the sister concern but was used for the purpose of business of the appellant which was not the owner. 9. The judgment which Ld. AR has relied are distinguishable and rather are against the assessee. In Seth Banarasi Das Gupta cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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