ITAT allows Half Depreciation as Asset was put to use on Temporary structure of Office [Read Order]

The Income Tax Appellate Tribunal (ITAT) allows half depreciation as an asset was put to use for a claim of 100% depreciation on the temporary structure of the office.

The only issue in this appeal of the assessee, SDS Ramcides Crop Science Pvt. Ltd is as regards the order of the Commissioner of Income Tax (CIT) upholding the action of the Assessing Officer (AO) in making disallowance of depreciation to the extent of Rs. 63,10,205/-.

The Counsel for the assessee, H. Yeshwanth Kumar submitted that the assessee has refurnished the office which is a leasehold premise, and claimed 100% depreciation on a temporary structure, which is in the nature of wireless access point, false roofing, wall-to-wall carpet, partition walls of temporary structure which are incapable of being salvaged in the event of vacation of the premises and also explained that the Assessing Officer has considered the wrong amount for disallowance while completing the assessment and Assessing Officer has wrongly assumed that the assessee has claimed 100% depreciation on the total amount of Rs. 1,26,20,410/.

The Counsel further contended that the actual facts are that the assessee has made the claim of 50% of the amount i.e., 63,10,205/- being 50% of the total amount against these assets were put to use with effect from 25.03.2014. The Assessing Officer wrongly disallowed the entire amount of Rs. 1,19,89,390/- after reducing 10% of depreciation of 50% i.e., 6,31,021/-. The Commissioner of Income Tax(CIT)rectified this mistake but allowed depreciation at 10% in principal and rectified that the assessee is eligible for 50% of the amount i.e., 63,10,205/-.

Mahavir Singh, Vice President, and Manoj Kumar Aggarwal, Accountant Member held that” The assessee is entitled to this claim of Rs. 63,10,205/- at 100% depreciation but only half of the depreciation because the asset was put to use only with effect from 25.03.2014. Hence, we allow the claim of the assessee, and accordingly, the appeal of the assessee is allowed.”

To Read the full text of the Order CLICK HERE

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