Depreciation allowable on home-theatre used for business purpose

DCIT Vs Tally Solutions Pvt. Ltd. (ITAT Bangalore)

Claim of depreciation on the home-theatre used for the business purpose is allowable in law – In absence of nexus between the borrowed funds and outstanding amount of the sister-concern, addition is not sustainable.

Facts-

AO observed that the assessee has diverted funds of INR 9,72,38,877 towards sister-concern without charging interest. AO made addition of INR 1,40,99,637 as interest @14.5%.

Further, AO observed that assessee had purchased home-theatre for an amount of INR 2,01,90,028 which was not for the business purpose and accordingly disallowed the same.

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