The Income Tax Appellate Tribunal (ITAT) Delhi Bench has held that interior design, electrification charges, furniture charges, wallpaper, toughened glass, etc. are purely temporary structures; ITAT allows 100% depreciation
The appellate, M/s. India Safari and Tours Ltd. is engaged in the business of inbound tours and provides tour and travel services to foreigners coming to India. During the examination of the case, the Assessing Officer noticed an addition of Rs.16,28,357/- in the schedule of fixed assets was filed with the revised return. Without satisfying with the reply, AO disallowed the amount reducing Rs. 81,418/- as depreciation and added Rs. 15,46,939/- to the total income of the assessee. The CIT (A) confirms the addition; hence, the assessee filed an appeal before ITAT.
The counsel for the assessee submitted that it is a purely temporary structure on which 100% depreciation has to be allowed. The counsel further submitted that Higher Courts on several occasions have held that such temporary structures are eligible for claim as revenue expenditure.
The Tribunal observed that the expenditure is for interior design, electrification charges, furniture charges, wallpaper, toughened glass, etc. These items are certainly revenue fixtures when used in the rented premises. The hypothesis of AO, that these are “probably” addition to furniture and fixture is guesswork, and not sustainable in law.
The Coram of Mr. Shamim Yahya, Accountant Member, and Ms. Astha Chandra, Judicial Member by relying on the decision of Allahabad High Court in the matter of Girdhari Dass & Sons vs. CIT has held that “we set aside the orders of authorities below on this issue and decide the issue in favor of the assessee”.
Mr. D.C. Garg, CA, and Ms. Anupama Singla appeared on behalf of the appellant and revenue respectively.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
