Depreciation for Resorts shall be allowed for Entire Year even if used less than 180 Days: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the depreciation under section 32 of the Income Tax Act, 1961 shall be granted for resorts for the entire year despite the fact that the property was used for less than 180 days in a year.

While scrutinizing the balance sheet of the assessee, the Assessing Officer found that in Schedule 4 of Fixed Assets, the assessee has shown several properties and has claimed depreciation amounting to Rs. 22,09,066/–. The assessee stated that the assessee is a hotelier and he is running a resort which has seasonal business but the resort is used for the entire year, and, therefore, the claim of depreciation cannot be restricted to 50%.

While holding in favour of the assessee, the Two Member bench comprising Judicial Member Mr. Amit Shukla and Accountant Member Mr. N K Billaiya observed that the depreciation shall be allowed to the assessee for the entire year.

“There is no dispute that the assessee is running a resort at Raj Niwas Palace, Dholpur. It Is also not In dispute that being a tourist place, the occupancy is not throughout the year but only in seasons favourable to the tourists. Therefore, basis the revenue of some months, it cannot be construed that the asset was used only for less than 180 days. We, therefore, direct the Assessing Officer to allow depreciation for entire year. Addition of Rs. 14,00,672/- is directed to be deleted,” the bench said.

To Read the full text of the Order CLICK HERE

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