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TMI Blog2015 (2) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... see. 3. Brief facts of the case are that the assessee had entered into two separate Sale Agreements both dt.15.01.2007 with Heaven Buildwell Pvt. Ltd. for purchase of office unit Nos.4H and 4J each measuring 1500 sq. ft. on the 4th Floor of commercial Complex on Plot No.6, Jasola Commercial Centre, New Delhi built by India Colonizers Pvt. Ltd. for an aggregate consideration of Rs. 6,75,00,000/-. The cost of commercial office comprised of:- (a) Cost of flat paid to seller Rs. 6,75,00,000/- (b) Brokerage Rs. 6,14,715/- (c) Freehold charges Rs. 14,55,000/- (d) Cost of Civil, electrical, sanitary work etc. Rs. 33,85,433/- Total Cost Rs. 7,29,55,148/- 4. The said asset purchased during A.Y.2008-09 was, after fit-out, brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract with buyer of commercial space has any clause with regard to the treatment of land in case of natural calamity affecting the structure or any other reason affecting the building. And if not how the ownership over the land shall be settled in such situations. The developer replied that in case of natural calamity affecting the structure due to any other reason the ownership of the land would be divided among all the occupants. 8. The ld CIT(A) however deleted the disallowance of depreciation and hence the appeal by the revenue is before us. 9. The ld DR contended that the ld CIT(A) has failed to appreciate that no depreciation can be allowed on cost of land forming part of the cost of building. He submitted that the price of land was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e developer replied that the cost of construction was added to the cost of land and the price of the commercial space was arrived at and the same was charged from the assessee. The fifth submission is that Delhi Apartment Ownership Act has not been implemented in Delhi as the government has not appointed the "Competent Authority" till date. Therefore, reliance placed by AO is wholly misconceived." 10. We have heard the rival submission and perused the records. We have perused the agreement dated 03.01.2006 between M/s. India Colonizers Pvt. Ltd. And Mr. Inder Aravinder Singh, the original allottee, who assigned their respective rights to the appellant at a price. 11. The relevant clauses of the agreement has also been extracted by the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby agreed to be acquired by the SPACE BUYER, he/she/they shall have no claim, right, title or interest of any nature or kind whatsoever except right to ingress/egress over or in respect of land, open spaces and all or any of the common areas such as lobbies, staircase, lifts, corridors, terrace and roof etc. which shall remain the property of the DEVELOPERS, who may use and utilize the same in any manner they like and the SPACE BUYER shall have no claim or objection to the same. " clause 13 of agreement Pg 5, Notwithstanding the fact that a portion of the common area has been included for the purpose of calculating the super area of the 'Said Premises', it is specially made clear that it is only the inside space in the 'Said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 377 ). The question before the Supreme Court was whether the cost of land is entitled to depreciation along with cost of building standing thereon. Reversing the judgment of the Punjab & Haryana High Court; the Hon'ble Supreme Court held that building does not include the site because there cannot be any question of destruction of site. It is further held that the word used is 'depreciation' and depreciation means decrease in value of property through wear & tear deterioration, obsolescence. (Webster's New Word Dictionary). In that sense, land cannot depreciate. Depreciation is allowable only on the value of superstructure on the land and not on the value of land. The legal principles laid down by the Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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