AO adds Building Depreciation Amount and Loan Amount: ITAT restores matter to Consider Additional Evidence [Read Order]
The tribunal remitted the matter back to the AO and was directed to consider the documents submitted by the assessee
![AO adds Building Depreciation Amount and Loan Amount: ITAT restores matter to Consider Additional Evidence [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/building-depreciation-amount-depreciation-amount-loan-amount-ITAT-ITAT-restores-matter-additional-evidence-evidence-taxscan.jpg "AO adds Building Depreciation Amount and Loan Amount: ITAT restores matter to Consider Additional Evidence [Read Order]")
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has restored the issue of disallowance of depreciation on building amount and addition of loan amount for fresh consideration of additional evidence. Rajeev Mittal (assessee) is an individual who purchased a commercial property for Rs. 40,00,000 against the circle rate of Rs. 1,51,39,000. The assessee also claimed...
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has restored the issue of disallowance of depreciation on building amount and addition of loan amount for fresh consideration of additional evidence.
Rajeev Mittal (assessee) is an individual who purchased a commercial property for Rs. 40,00,000 against the circle rate of Rs. 1,51,39,000. The assessee also claimed depreciation amounting to Rs. 5,05,989.
The Assessing Officer (AO) noted that the assessee was not able to prove the nexus between the building and the assessee's business nor any revenue has been generated from the said building.
Read More: Wrong Branch GSTN on Invoice: Delhi HC overturns ₹5.65 Crore GST ITC Rejection [Read Order]
The Assessing Officer (AO) had concluded that the assessee did not prove the building's use for business. The AO also noted in the case of loan addition, that the assessee failed to establish the creditworthiness of the lender despite providing confirmations.
TDS Mistakes Cost You More Than You Think – Stay Compliant with This Handbook!, Click Here
Therefore, the Assessing Officer (AO) made the following additions while completing the assessment: Rs. 5,09,989 was disallowed as depreciation on a building under Section 32, citing a lack of evidence of business use.
The AO also added Rs. 49,08,400 under Section 68 as unexplained cash credit, stating that the creditworthiness of the loan lender was not established.
Aggrieved by order of the AO, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) upheld the disallowance of depreciation and loan additions while modifying the valuation-based addition.
TDS Mistakes Cost You More Than You Think – Stay Compliant with This Handbook!, Click Here
Aggrieved by the order of CIT(A), the assessee filed an appeal before ITAT. The counsel for the assessee submitted that some papers were not before the authorities below. Therefore, the counsel pleaded to remit the matter to AO.
The two-member bench comprising Shri Shamim Yahya ( Accountant Member ) and Shri Vimal Kumar (Judicial Member) observed that some papers were not before the lower authorities. The tribunal also directed the AO to consider the documents submitted by the assessee.
The tribunal directed the AO to provide adequate hearing opportunities. Therefore, the tribunal remitted the matter back to the AO's file. The assessee's appeal was partly allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
