1970-VIL-446-ITAT-

Income Tax Appellate Tribunal NEW DELHI

ITA No:- 477/Del/2017

Date: 01.01.1970

M/s NATIONAL HOUSING BANK

Vs

DY. COMMISSIONER OF INCOME TAX, NEW DELHI

JUDGMENT

ANADEE NATH MISSHRA, J.

(A) This appeal has been filed by the Assessee against impugned appellate order dated 21.10.2016 of Learned Commissioner of Income Tax (Appeals)-33, New Delhi, [“Ld. CIT(A)”, for short), pertaining to Assessment Year 2012-13, on the following grounds:

“1. On the facts and in the circumstances of the case, the authorities below have erred in disallowing a sum of Rs. 36,40,145/- being depreciation on office buildings considering the same attributable towards cost of land.

2. The authorities below have erred in not considering the contention of the assessee that in absence of segregation of the value of land, depreciation was being claimed on the basis of total cost paid to the India Habitat Centre.

3. The authorities below have erred in not considering the contention of the assessee that the land is also leasehold which is also subject to amortization and effectively the total cost paid for the premises will be considered for allowance of depreciation.

4. The authorities below had erred in making/ sustaining illegal additions by applying completely distinguishable cases and ignoring the cases cited during the proceedings which were applicable in the appellant’s case. Thus sustaining the illegal levy of disallowances under the stated provisions.

5. The appellant prays for further/ additional submissions and grounds to be allowed to be filed before final hearing and further prays for early out-ofturn hearing to allow the appeal with consequential relief, after hearing both sides.

6. It is prayed accordingly.”

(B) Assessment Order dated 31.03.2015 was passed under Section 143(3) of Income Tax Act, 1961 (“I.T. Act”, for short), wherein, interalia, depreciation amounting to Rs. 40,44,605/- on office premises at India Habitat Centre was disallowed by the Assessing Officer (“AO”, for short). The relevant portion of the Assessment Order dated 31.03.2015 is reproduced as under:

(C) Aggrieved, the assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 21.10.2016 of the Ld. CIT(A) restricted the disallowance to Rs. 36,40,145/- and deleted the remaining amount. The relevant portion of the impugned appellate order dated 21.10.2016 of the Ld. CIT(A) is reproduced as under:

(C.1) Aggrieved again, the assessee filed this present appeal before Income Tax appellate Tribunal (“ITAT”, for short). In the course of appellate proceedings in ITAT, a synopsis was filed from assessee’s side; the relevant portion of which is reproduced as under:

(C.2) A copy of order in the case of Joint Commissioner of Income-Tax vs. Rajesh Exports Ltd. [2006] 9 SOT 28 (Bangalore)(URO) and copy of order dated 28.03.2019 of Co-ordinate Bench of ITAT, Delhi, in assessee’s own case for Assessment Years 2010- 11 and 2011-12 in ITA Nos.- 536/Del/2014, 6888/Del/2014, 708/Del/2014 and 6799/Del/2014; were also filed from the assessee’s side during appellate proceedings in ITAT.

(D) At the time of hearing before us, the Ld. Authorized Representative (“Ld. AR”, for short) for assessee submitted that the issue in dispute regarding assessee’s claim of depreciation amounting to aforesaid Rs. 36,40,145/- is squarely covered in favour of the assessee by aforesaid order dated 28.03.2019 of Co-ordinate Bench of ITAT, Delhi, in assessee’s own case. He further submitted that the matter is also covered in favour of the assessee by the aforesaid order in the case of Joint Commissioner of Income-Tax vs. Rajesh Exports Ltd. (supra). The Learned Senior Departmental Representative (“Ld. Sr. DR”, for short) for Revenue agreed that the issue in dispute is squarely covered in favour of the assessee by the aforesaid order in the case of Joint Commissioner of Income-Tax vs. Rajesh Exports Ltd. (supra) and order dated 28.03.2019 of Co-ordinate Bench of ITAT, Delhi, (supra).

(E) We have heard both sides. We have also perused the materials available on record. It is not in dispute that the issue in dispute in the present appeal is squarely covered in favour of the assessee by aforesaid orders in the case of Joint Commissioner of Income-Tax vs. Rajesh Exports Ltd. (supra) and order dated 28.03.2019 of Coordinate Bench of ITAT, Delhi, (supra). Also, no distinguishing facts and circumstances have been brought to our notice by either side to persuade us to take a view different from the view taken by the ITAT in the aforesaid orders in the case of Joint Commissioner of Income-Tax vs. Rajesh Exports Ltd. (supra) and order dated 28.03.2019 of Co-ordinate Bench of ITAT, Delhi, (supra). For ease of reference, the relevant portion of the aforesaid order dated 28.03.2019 of Co-ordinate Bench of ITAT in assessee’s own case is reproduced below:

“25. AO as well as id. CIT (A) has disallowed an amount of Rs. 40,44,605/- claimed as depreciation on office building on the ground that the same is attributable towards cost of land.

26. Ld. AR for the assessee contented that in the absence of any segregation of value of land, depreciation has been claimed on the basis of total cost paid to India Habitat Centre because land is also leasehold being subject to amortization and effectively the total cost paid for the premises will be considered For amount of depreciation. Ld. AR relied upon the decision rendered by the coordinate Bench of the Terminal in CIT vs. Rajesh Exports Ltd. (2006) 9 SOT 28 (Bang.) which has further than relied upon by the co-ordinate Bench of the Tribunal in ease of ITO vs Millennium Spire India Management (P) Ltd. ITA No.3297/Del/2013.

27. Operative part of the aforesaid decisions rendered by the coordinate Bench of the Tribunal in CIT vs, Rajesh Exports Ltd. (supra) is extracted for ready perusal as under:

“Under section 32(1) of the Act, the word "building” is to be interpreted as the superstructure and not land. Where the assessee purchases building and the purchase price (as per sale deed) is a composite one (sale deed does not indicate the prices of land and building separately), then no distinction at feast in the consideration paid to the vendor can be made. However, if there is a clear-cut identity in respect of price paid to the land and building (Le., sale deed indicates price of land and building separately), then Assessing Officer is right in allowing depreciation only an the building."

28. In this case also, when the assessee bank does not have any segregation value of land and building of the said premises and it has paid composite price, the entire depreciation claim is allowable under Section 32 of the Act. So, following the aforesaid decision rendered by the Co-ordinate Bench of the Tribunal in CIT vs. Rajesh Exports Ltd. (supra), and when it is categoric case of the assessee that the purchase price of land and building is composite one and it has no segregation of value of land and building separately, disallowance made by the AO/ CIT (A) is not sustainable in the eyes of law. So, Ground No. 5 to 8 of ITA No. 6888/Del/2014 (AY 2011-12) of assessee’s appeal is determined in favour of the assessee.” 

E.1) Respectfully following the aforesaid order dated 28.03.2019 of Co-ordinate Bench of ITAT in assessee’s own case, we also decide the issue in dispute in the present appeal before us, in favour of the assessee and direct the AO to allow the assessee’s claim for depreciation amounting to aforesaid Rs. 36,40,145/-.

(F) In the result, appeal filed by Assessee is allowed.

Order pronounced in the open court on 10/02/2020.

 

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