2021 (1) TMI 785 - AT - Income Tax

Disallowance of depreciation on rental assets - assessee company is not using the assets for self use and the assets were hired out for a fixed period and the agreements provided that on payment on all instalments the title of the assets passes on to the hirer - CIT-A deleted the addition - HELD THAT - A perusal of the order of the Ld. CIT(A) shows that while deleting the disallowance he has followed the decision of the Tribunal in assessee s own case in the preceding assessment year 2016 (11) TMI 1362 - ITAT DELHI Since the AO while disallowing the depreciation has followed the order of his predecessor and disallowed the depreciation holding that the order of the Ld. CIT(A) deleting the disallowance has been challenged by the revenue before the Tribunal and since the Tribunal has already deleted such disallowance, therefore we do not find any infirmity in the order of the Ld. CIT(A) deleting such disallowance of depreciation. Ld. DR could not point out any distinguishing features so as to take a contrary view from the view taken by the Ld. CIT(A) on this issue. - Decided against revenue.

Summary

Issues:
1. Dismissal of appeals under Vivad Se Vishwas Scheme 2020.
2. Deletion of depreciation on rental assets.

Issue 1: Dismissal of appeals under Vivad Se Vishwas Scheme 2020:
The assessee filed an application seeking withdrawal of two appeals as they opted for the Vivad Se Vishwas Scheme 2020 and obtained Form No. 3 under section 5(1) of the scheme. The appeals were consigned to record and treated as dismissed, subject to the condition that if the dispute is not resolved under the scheme, the assessee can approach the Tribunal for reinstatement. The Revenue did not object to this caveat, and both appeals were dismissed for statistical purposes.

Issue 2: Deletion of depreciation on rental assets:
The dispute revolved around the deletion of depreciation amounting to ?2,96,50,443 on rented assets by the Ld. CIT(A). The AO disallowed the depreciation claimed by the assessee, arguing that the assets were hired out and not used for self-use. However, the Ld. CIT(A) deleted the disallowance, citing previous Tribunal decisions in the appellant's case. The Tribunal noted that the AO followed the predecessor's order in disallowing the depreciation, but the Ld. CIT(A) had already deleted the disallowance, which was upheld by the Tribunal. The Tribunal found no infirmity in the Ld. CIT(A)'s decision and dismissed the revenue's appeal, as no distinguishing features were presented to take a contrary view.

In conclusion, the appeals under the Vivad Se Vishwas Scheme 2020 were dismissed, and the deletion of depreciation on rental assets was upheld by the Tribunal based on previous decisions and lack of distinguishing features presented by the revenue.