Case Law Details
LTIMindtree Limited Vs DCIT (ITAT Bangalore)
ITAT Bangalore held that depreciation under section 32 of the Income Tax Act is allowable only when the asset is put to use for the business purpose. Notably, the onus is on the assessee to prove that the assets are put to use for the business purposes only.
Facts- During the course of assessment proceedings, the Assessing Officer observed that the assessee has acquired new assets of Rs. 4,22,01,852/- during the previous year and claimed depreciation of Rs. 2,23,01,237.
The assessee was asked to furnish evidence in respect of the acquisition of new assets. The assessee furnished details of the list of fixed assets addition during FY 2005-06 and enclosed copies of two invoices indicating the purchase of assets worth of Rs. 64,480/- dated 20.08.2005 and Rs. 93,600/- dated 17.08.2005 and in regard to balance of assets, the counsel for the assessee stated that it was very difficult to produce the copies of all the new assets purchased and contended that sample of two assets have already been furnished and requested to complete the assessment on the basis of evidence furnished.
AO after referring to section 32 of the Act observed that the assessee’s AR expressed his difficulty to furnish the evidence with regard to the ownership of the new assets acquired by the assessee during the previous year except for two sample invoices. Hence, it is reasonably presumable that the assessee does not own the properties and thus it is not eligible for claim of depreciation. Hence, the depreciation claimed on the new assets, except the assets relating to which the invoices have been produced is rejected and added to the income returned.
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