Case Law Details
Sports Authority of Gujarat Vs DCIT (ITAT Ahmedabad)
This ground of the assessee relates to the claim of deduction on depreciation against income from interest which according to the assessee qualifies as income from business or profession. Having held that the income from interest qualifies as ‘income from other sources‘ in the preceding paragraphs, the issue for consideration before us is whether the assessee can claim depreciation against such interest income being ‘income from other sources’.
In view our view, language of section 57(ii) of the Act is clear and unambiguous so far as allowability of claim of depreciation in respect of income earned under the head “income from other sources” is concerned. Section 57(ii) of the Act provides that depreciation u/s. 32(1) or 32(2) is allowable in case any income is assessable under this head only if it is income from letting on hire of any machinery, plant or furniture. However, in the instant case, since income received is from interest on investment of surplus fund and since the same is assessable under the head “income from other sources”, in our view, depreciation u/s. 32 of the Act is not allowable to the assessee. With respect to the contention of the assessee that in view of the decision of Rakesh Singh Vs. ACIT, ITAT Bangalore wherein the Hon’ble Bangalore Bench had held that the Assessing Officer was duty bound to grant depreciation allowance, whether the same is claimed by the assessee or not, in our view, the aforesaid decision in the case of Rakesh Singh vs. ACIT is not applicable to the assessee’s set of facts. This aspect was earlier correctly noted by the ld. CIT(A) in his order who held that in the case of Rakesh Singh (supra) there was positive income under the head “profits and gains on business or profession” and depreciation was claimed on the motor cars which were used for the purpose of business of the assessee and on fulfilling the conditions as laid down in section 32 of the Act. However, as noted above, the assessee in the present set of facts is not earning any business income and has earned only interest income which is assessable as “income from other sources”. Accordingly, in our view, depreciation as claimed by the assessee cannot be allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-9, Ahmedabad in Appeal no. CIT(A)-9/10325/DCIT(E)(HQ)/17-18 vide order dated 04/03/2019 passed for the assessment year 2010-11.
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