2020 (10) TMI 98 - HC - Income Tax

Depreciation on Floor Space Index (FSI) @ 10% - Whether grant of additional FSI is not in the nature of any kind of assets until and unless the additional flooring/building is constructed, therefore, not eligible for depreciation in this case? - HELD THAT - This issue has been decided by us in the connected appeal i.e. Income Tax Appeal 2020 (9) TMI 928 - BOMBAY HIGH COURT arising out of the same common order of the Tribunal for the assessment year 2006-2007. It has been held that no substantial question of law arises on this issue from the order of the Tribunal. Following the said order we dismiss the present appeal of the revenue by holding that no substantial question of law arises from the order of the Tribunal. Depreciation on intangible assets - HELD THAT - Same question already been answered by this Court in the case of the assessee itself in 2018 (12) TMI 1338 - BOMBAY HIGH COURT the only difference being that at that stage the assessee was known as Tulip Hospitality Services Limited. It has been held that it is not a substantial question of law.

Summary

Issues:
1. Allowance of depreciation on Floor Space Index (FSI) as an asset.
2. Allowance of depreciation on intangible assets.

Issue 1: Allowance of depreciation on Floor Space Index (FSI) as an asset

The appeal before the High Court was filed by the revenue under section 260A of the Income Tax Act, 1961, against the order passed by the Income Tax Appellate Tribunal for the assessment year 2007-2008. The specific question raised was whether the Tribunal was justified in allowing depreciation on Floor Space Index (FSI) without considering that additional FSI does not constitute an asset until the construction is completed. During the hearing, it was noted that a similar issue had been addressed in a previous case related to the same assessee. The High Court relied on a previous decision regarding the assessment year 2006-2007 and concluded that no substantial question of law arose from the Tribunal's order. Consequently, the High Court dismissed the appeal by holding that no substantial question of law was present in this regard.

Issue 2: Allowance of depreciation on intangible assets

The second question raised in the appeal was whether the Tribunal was justified in allowing depreciation on intangible assets claimed by the assessee. During the hearing, it was acknowledged that a similar issue had been addressed in a previous case involving the same assessee. The High Court referred to a previous decision and noted that it had already been determined that the matter did not involve a substantial question of law. Therefore, the High Court dismissed the appeal on this issue as well, following the precedent set in the earlier case. The High Court concluded that no substantial question of law arose from the Tribunal's order regarding the allowance of depreciation on intangible assets.

In conclusion, the High Court, consisting of Ujjal Bhuyan and Milind N. Jadhav, JJ., dismissed the appeal filed by the revenue concerning the allowance of depreciation on Floor Space Index (FSI) and intangible assets for the assessment year 2007-2008. The Court held that no substantial question of law arose from the Tribunal's order on both issues and, therefore, there was no basis for overturning the Tribunal's decision.