Shares, being tangible assets, depreciation not allowable u/s 32(1)(ii)

DCIT Vs Sanjana Cryogenics Storages Ltd. (ITAT Mumbai)

Shares are financial assets classified as tangible assets because they derive value from contractual claims. Hence, the same is not depreciable u/s 32 (1) (ii) of The Act.

Facts-

The assessee is a company engaged into the business of running of ammonia storage terminal, generation of power, dealing in ammonia, and trading/investing in shares, mutual funds, and derivatives. During scrutiny assessment, AO disallowed depreciation amounting to Rs 4,44,07,662/– and computed the total income of the assessee at ₹ 132,394,070/–.

The CIT (A) deleted the disallowance. Being aggrieved, Revenue filed an appeal before ITAT.

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