Niyant Heritage Hotels [P] Ltd Vs I.T.O (ITAT Delhi)
There Is no dispute that the assessee is running a resort at Raj Niwas Palace, Dholpur. It Is also not In dispute that being a tourist place, the occupancy is not throughout the year but only in seasons favourable to the tourists. Therefore, basis the revenue of some months, it cannot be construed that the asset was used only for less than 180 days. We, therefore, direct the Assessing Officer to allow depreciation for entire year.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is preferred against the order of the CIT[A]- 20, New Delhi dated 16.03.2016 pertaining to Assessment Year 2011-12.
2. At the very outset, the ld. counsel for the assessee stated that he is not pressing Ground Nos. 1, 3 and 5 and the same are dismissed as not pressed.
3. Ground No. 2 relates to the disallowance of Rs. 6,05,150/- made by the Assessing Officer.
4. Briefly stated, the facts relating to this grievance of the assessee are that during the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has claimed deduction for interest on borrowed funds under section 24(b) of the Income-tax Act, 1961 [hereinafter referred to as ‘The Act’] amounting to Rs. 6,05,150/-. The assessee was asked to furnish documentary evidence with regard to the loan taken as the same was used for the acquisition of the said building situated at Jasola, Okhla industrial area, New Delhi.
5. The assessee explained that the loan has been taken from M/s Perfect Turner for the purchase of the property and filed loan confirmation. The submission of the assessee did not find any favour with the Assessing Officer who was of the firm belief that the deduction under section 24(b) of the Act cannot exceed Rs.1.50 lakhs and, accordingly, went on to make addition of Rs. 6,05,150/–.
6. The assessee carried the matter before the ld. CIT(A) but without success.
7. Before us, the ld. counsel for the assessee vehemently stated that the said property is a let out property which was purchased out of borrowed funds from M/s Perfect Turner and, therefore, interest paid by the assessee should be allowed as deduction.
8. Per contra, the ld. DR strongly supported the findings of the AO/CITA.
9. We have carefully considered the orders of the authorities below. The assessee may have purchased the property out of borrowed funds, but the onus is upon the assessee to demonstrate that the said borrowed funds have been fully utilized for purchase of the said property and further demonstrate that the payment of interest is in respect of the said borrowed funds. No documentary evidences were furnished before the lower authorities nor before us. Therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 2 is, accordingly, dismissed.
10. Ground No. 4 relates to the disallowance of Rs. 7,02,000/–.
11. Facts relating to this addition show that during the assessment proceedings, on perusal of the cashbook, the Assessing Officer noticed that cash has been shown to be withdrawn from the bank as under:
