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TMI Blog2014 (2) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... Dubai - Thereafter, vessel had gone to various places thus, the vessel has earned the total freight charges which is reflected in the profit and loss account – thus, the assessee has used this vessel for carried out the business – the CIT(A) is justified in his action – Decided against Revenue. Deletion made on account of lease rent of luxury cruiser – Accrual of rent and System of accounting – Held that:- The assessee has accounted the rent only at 50% of the total lease rent – the assessee has received the lease rent from March-April - The assessee has received lease rent from M/s. Advani Hotels & Resorts (I) Ltd. for period of 16th March 2005 to 15th April 2005 - The assessee has received the amount but as the assessee was following M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Later on, the case was selected for scrutiny and the assessment u/s. 143(3) was completed on 30.11.2007 determining the total income at Rs. 39,20,120/-. The assessee has filed depreciation schedule of the Fixed Assets for the financial year 2004-05 relevant to the assessment year 2005-06. The assessee has acquired a Ship M.V. Maanav Star at Rs. 3,66,82,240/- and claimed depreciation of Rs. 91,39,468/- on the same ship at the rate of 25% per annum. The Assessing Officer was of the view that the Ship M.V. Maanav Star was not put to use in the previous year relevant to the assessment year 2005-06 therefore, show cause notice was given to the assessee, why the depreciation should not be granted. The assessee contended that the ship was used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration and therefore, the A.O is directed to allow the depreciation of Rs. 91,39,468/- and delete the addition made on this account. The appeal on this ground is allowed." 3.1. The Learned DR submitted that Ship Maanav Star was purchased and delivered to the new owners on 24th August, 2004. On 11th September 2004 the vessel was departed and main engine was stopped due to bad weather, therefore, vessel was grounded on 11.09.2004 and the vessel arrived at Mormugaon on 28th March, 2005 and it was dry docked till April 08, 2005 which AO verified from the log book of the vessel therefore, when the vessel was not put to use there is no reason to grant of depreciation. 3.4. The Learned DR relied upon the order of the CIT(A). 3.5. The Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee has received lease rent of Rs.1,61,18,200/- from luxury cruiser leased to M/s. Advani Hotels Resorts(I) Ltd. The Assessing Officer has verified the record and from the record it is found that as per agreement between assessee and M/s. Advani Hotels Resorts (I) Ltd. the Luxury cruise/vessel was given on lease to M/s. Advani Hotels Resorts(I) Ltd. and as per the same agreement the assessee has received lease rent for the period April 2004 to 15th April 2005. The total amount received is Rs. 1,68,80,700/- whereas the assessee has shown the total lease rent in its books of account of only Rs. 1,61,18,200/-. Therefore, AO was of the view that assessee was received more rent and he has shown the advance rent at Rs.7,62,500/- i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case, we find that the assessee has given the lease rent which was received by him. We find that it is the contention of the assessee that from March - April. The assessee has accounted the rent only at 50% of the total lease rent. We find that assessee has received the lease rent from March-April. The assessee has received lease rent from M/s. Advani Hotels Resorts (I) Ltd. for period of 16th March 2005 to 15th April 2005. The assessee has received this amount but as the assessee was following Mercantile System and the Assessment Year ending on March. Therefore, assessee has shown the lease rent at Rs.7,62,500/- for A.Y. 2006-07 and remaining rent was shown in the subsequent year. Therefore, CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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