Niho Construction Limited Vs DCIT (ITAT Delhi)
Assessee claimed 100% Depreciation on Mobile Phones, each of which cost less than Rs. 5,000/-. But Assessing Officer (AO) restricted the depreciation to 15%, treating them general plant & Machinery. Assessee approached ITAT and AO argued that List of items on which 100% depreciation is allowed is specifically provide in Income Tax Act and Mobile Phones are not mentioned in it ITAT accepted the argument and restricted Depreciation to 15%.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee emanates from the order of the CIT (Appeals)-XVI, New Delhi dated 25.01.2011 for the Assessment Year 2007-08.
2. The assessee company is incorporated on 06.02.2001 and it is engaged in the business of development of residential and commercial complexes. The return of income was filed on 12.11.2007 which was further revised on 31.03.2009.
3. The grounds of appeal read as under :-
“1. That on the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in law while confirming the following disallowances of expenses incurred wholly and exclusively for the business of the assessee company:
1. Out of Salary amounting Rs.1800000/-
2. Out of Depreciation on Mobile Phones amounting Rs.520393/-
II. That on the facts and circumstances of the case the learned Commissioner of Income Tax(Appeals) has erred in law while making the unjustified addition to the returned income on account of Provident Fund being Employees Contribution amounting Rs.663966/- disregarding the Hon’ble Delhi High Court’s ruling in the case of CIT vs P.M. Electronics Ltd. It is pertinent to submit that no expense has been claimed on this account while arriving at the returned income.
III. The Appellant craves for grant of permission to add, alter or withdraw any ground of appeal at any time before the hearing of the appeal.”
4. In the ground no.1, one of the issues involved is disallowance sustained by the CIT (A) out of salary amounting to Rs.18,00,000/-
5. While making the assessment for the Assessment Year 2005-06, the Assessing Officer noticed that assessee company has paid huge salary to the ladies who are relatives of Directors / CEO. The details of these persons are as under :-
