Case Law Details
ACIT (Exemptions) Vs Raghavendra Educational (ITAT Bangalore)
In the case of ACIT (Exemptions) vs. Raghavendra Educational before the ITAT Bangalore, the appeal by the revenue was directed against the order of NFAC for the assessment year 2016-17. The revenue raised several grounds of appeal, primarily challenging the allowance of depreciation claimed by the assessee for the financial year 2015-16.
The Assessing Officer (AO) disallowed the depreciation claimed by the assessee on the basis that the cost of acquisition of the assets had been allowed as capital expenditure in earlier years and was therefore held as income for the impugned assessment year. However, the AO did not specify the assessment year in which the alleged capital expenditure was allowed, nor did they provide details of the assets on which the capital expenditure was claimed.
The ld. CIT(A) noted that the AO’s disallowance was based on suspicion and guesswork, and the case laws referred to were not applicable to the assessee’s situation. The ld. CIT(A) directed the AO to delete the addition after perusing the details submitted by the assessee.
However, the Tribunal observed that while the provision of section 11(6) of the Income Tax Act, 1961, which disallows depreciation if the cost of acquisition of an asset has been claimed as an application of income under section 11, was applicable from the assessment year 2015-16 onwards, it was necessary to verify whether the assessee had indeed claimed the cost of purchase of fixed assets as an application of income in earlier years. If so, granting depreciation again would result in double deduction.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
