Delhi High Court
Inspecting Assistant ... vs Ansal Properties & Industries (P) ... on 23 June, 1993
Equivalent citations: (1996) 54 TTJ Del 585
ORDER
M. A. BAKSHI, J. M. :
Revenue is in appeal against the decision dt. 1st March, 1989 of the CIT(A)-I. The first ground of appeal is relating to annual letting value of three multi-storeyed buildings, namely, Ashajeet, Surya Kiran and Ansal Bhavan amounting to Rs. 1,05,59,160 having been deleted by the first appellate authority. assessed having constructed certain flats in the aforementioned buildings had sold the same, and handed over the possession of the flats to the buyers. However, the property had not been transferred by means of registered sale deeds. The Assessing Officer (AO) was of the view that assessed was liable to tax in respect of the annual letting value of the properties as they continued to be the de jure owner of the property.
2. The CIT(A) followed his earlier orders for asst. yrs. 1983-84 and 1984-85 to delete the income from the aforementioned properties which was assessed at Rs. 1,05,59,160.
3. The view taken by the first appellate authority is in consonance with the decision of the Tribunal in assesseds own case for asst. yrs. 1976-77, 1981-82 in ITA Nos. 789 and 2002/Del/1984; ITA No. 288/Del/1984 for asst. yr. 1973-74, ITA No. 3724 and 3890/Del/1983 for asst. yr. 1984-85.
Respectfully following the aforementioned orders of the Tribunal the ground raised by the Revenue is hereby dismissed.
4. Second ground of appeal is relating to the computation of disallowance under s. 37(3A) of the IT Act, 1961 in respect of the following amounts :
Rs.
Rs.
"(i)
Rebate and discount
1,21,985
(ii)
Cash discount
34,314
(iii)
Commission paid to staff
4,980
(iv)
Cash discount to customers
2,61,581
(v)
Brokerage and commission
2,61,067"
AO followed his order for asst. yr. 1984-85 for including the aforementioned amounts in computing the disallowance @20% under s. 37(3A) to (3D). The CIT(A) deleted the aforementioned amounts from the purview of s. 37(3A) by following her own order in assesseds own case for asst. yr. 1984-85. The decision of the CIT(A) for asst. yr. 1984-85 has been upheld by the Tribunal in ITA No. 3890/Del/988 for asst. yr. 1984-85, dt. 31st Jan., 1992. Since the view of the CIT(A) is in consonance with the decision of the Tribunal for asst. yr. 1984-85, we see no reasons to interfere.
5. The third ground of appeal is relating to the addition of Rs. 4,28,000 made by the AO under s. 37(4) of the IT Act, 1961 on the ground of being guest house expenses. assessed had obtained contract for construction of car parking and shopping complex in Baghdad, Iraq. For this purpose employees were required to be sent to Baghdad who were provided residential accommodation. The executives of the company were also taking benefit of the transit accommodation as and when they were on duty at Baghdad. The said accommodation was found not to be in the form of holiday homes. For the asst. yr. 1984-85, the AO considering the maintenance expenses of the accommodation so provided as for guest house accommodation in view of the amendment made by Finance Act, 1983 by insertion of sub-s. (5) of s. 37. The CIT(A), on the facts and in the circumstances of this case held that the accommodation provided to the employees and executives of the assessed-company was not in the nature of a guest house accommodation. The Tribunal for the asst. yr. 1984-85 upheld the view taken by the CIT(A). For the year under appeal, the learned CIT(A) has followed her order for asst. yr. 1984-85 which in turn has been confirmed by the Tribunal. We, therefore, see no merit in this ground of appeal also.
6. The next ground of appeal is relating to the disallowance of depreciation on imported jeeps. The assessed is executing contracts in Iraq. It had utilised Jonga jeeps, pick-up vans, cruisers and the cars for the purpose of its business. As per s. 32 depreciation in respect of the imported cars is not permissible unless these are used for hire, etc. The AO rejected the claim of the assessed that the assessed was bound to use imported cars in a foreign country for the purposes of business and the provisions of s. 32(1)(ii) could not be utilized for disallowing the depreciation in respect of such imported cars. In the past assessed had been allowed depreciation in respect of pick up vans, Jonga jeeps, etc., other than cars. However, for asst. yr. 1984-85 depreciation in respect of Jonga jeeps, pick up vans, etc, was also disallowed under s. 32(1)(ii). The CIT(A) deleted the disallowance in respect of the vehicles other than cars. The decision was accepted by the Revenue. For asst. yr. 1985-86, i.e., the year under appeal, the AO repeated the disallowance. Revenue appealed to the Tribunal. The learned Departmental Representative contended that depreciation in respect of imported jeeps, pick-up vans, etc., was not allowable under s. 32(1)(ii) and as such there was no justification for allowance of deduction to the assessed.
7. The learned counsel for the assessed pointed out that the law has been amended f. 1st April, 1992 and depreciation in respect of even imported cars used in foreign branches has been excluded from the bar under s. 32(1)(ii).
8. We, on careful consideration of the rival contentions, are of the view that the Revenue having all along allowed depreciation in respect of the Jonga jeeps, pick-up vans, etc., there was no warrant for taking a different view in the year under appeal, at least, for the sake of consistency. We, therefore, see justification for the CIT(A) in having deleted the disallowance. It is also observed from the order of the Tribunal for the asst. yr. 1984-85 that the disallowance in respect of cars alone has been confirmed. We, therefore, decline to interfere.
9. The last ground of appeal is relating to disallowance of depreciation on Caravans amounting to Rs. 7,74,088 having been allowed by the first appellate authority.
10. For the asst. yr. 1984-85 assessed had claimed depreciation in respect of labour Caravans @25% considering the total life of the caravans as 4 years. The first appellate authority, considering the nature of the construction of temporary sheds held the claim of the assessed as justified. Deduction was accordingly directed to be allowed. The Revenue accepted the decision of the first appellate authority for asst. yr. 1984-85. For the assessment year under appeal, the CIT(A) has followed her order for the asst. yr. 1984-85 and Revenue has not given any reasons as to why a different view should be taken for the year under appeal. In respect of the temporary structures depreciation is permissible @100%. assessed has spread the deduction in 4 years considering the total life of the structures. The system having been accepted by the Revenue in the immediately preceding year, we see no justification for taking a different view for the year under appeal. Ground raised by the Revenue is without any merit and is accordingly rejected.
11. The appeal of the Revenue is dismissed.
