Case Law Details
Mr. Sonu Nigam Namah Vs ACIT (ITAT Mumbai)
Assessee in this case has sold flat on which depreciation was claimed earlier. The written down value of the flat was Rs. 3,81,661/- the sale value of the flat was Rs. 80,87,740/-. The Assessing Officer has computed short term capital gain as per section 50 of the I.T. Act. The assessee has objected in as much as it is the claim of the assessee that the block of asset did not cease to exist. It is the claim of the assessee that the assessee was already having a residential premises “Namah”, part of which is claimed was used as his office. We find that this premises was treated as self occupied property. When the property was self occupied property, it cannot enter into the block of depreciable asset. Hence, this claim of the assessee is not at all sustainable. Assessee has also pleaded that assessee was using the part of the said premises for office purposes. Hence it is claimed that the property cannot be said to be not forming part of depreciable asset. We find that firstly there is no basis of this claim. Secondly since assessee has not claimed any depreciation on the same in earlier period the assessee’s claim of the part of the building used for official purposes can only be said to be an afterthought.
Further it is the claim of the assessee that subsequent to the sale of flat on which depreciation was claimed assessee has purchased a flat the income from which has been offered under the income from house property and that the new flat enters into the block of asset irrespective of the use. When the income from the new flat is being offered as income from house property by no stretch of imagination it can be said that it falls into the block of depreciable assets.
Learned Counsel of the assessee contended that claim of depreciation on an asset is not dependent upon its user and that asset is entitled for depreciation the moment it enters the block. We find that assessee’s counsel has also placed reliance on several case laws wherein it was held that once of asset enters into the block of asset it is entitled to depreciation claim irrespective of the fact that it was not used subsequently or for part of the period on the plank that there was passive user.
In the present case we find that the flats which never entered into the block of depreciable assets as income from the same were being offered under the head income from house property can by no stretch of imagination be said to be entitled for automatic entry into the block of depreciable asset. In this view of the matter, the reference to section 2(11), 43(6) & 50 by learned CIT(A) is germane and support the case of the Revenue. Section 2(11) defines block of asset as a group of asset falling within the class of asset in respect of which the same percentage of depreciation is permissible. The income from ‘Namah’ building and the premises in ‘Lakhani Centrium’ was falling under the head ‘income from house property’ and hence these premises cannot be said to be falling under any asset group on which any rate of depreciation is prescribed as on such asset no depreciation is permissible.
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