9911796707
TMI Blog2013 (11) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) justified in holding that the rejection of books of account in terms of Sec.145 of the Income Tax Act, 1961 was not justified without appreciating the fact that the assessee has failed to recognize revenue in terms of revised Accounting Standard, wherein revenue has to be recognized in the year in which it has earned and the same cannot be postponed to future. (b) Whether on facts and circumstances of the case and in law, the Ld.CIT(A) justified in deleting the addition of ₹ 3,36,35,031/- on account of income from the Ganga Tower II project, holding that it cannot be taxed in the current year, when the facts of the case show that even under project completion method, income is taxable in the current year as the project of the assessee is 67.32% complete. The Ld.CIT(A) has erred in observing that Assessing Officer made no attempt to show that substantial part of the project is complete. Further CIT(A) has erred in holding that no income from the project can be taxed in the current year as such income has been offered to tax in the subsequent year as is the present case. (c) Whether on facts and in the circumstances of the case and in law, the LdCIT(A) is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Park and Kukreja Plaza aggregating to ₹ 35,41,190/- was offered by the assessee on estimated basis. The method of accounting stated to be followed by the assessee was mercantile and the Revenue in respect of three projects namely Atur Park, Gopala and Kukreja Plaza was claimed to be recognized by following percentage completion method. The Revenue from other projects was claimed to be recognized on project completion basis. According to the A.O., the revised Accounting Standard - 7 (AS-7) was notified and made effective from A.Y. 2004-05 and the profit of the assessee, therefore, was liable to be determined as per the said standard. He, therefore, required the assessee to furnish certain details relating to its projects under execution during the year under consideration. As stated by the A.O. in his order, the assessee however, did not produce some of the material details required by him and furnished only some details and that too at the fag end of the assessment proceedings. He also noted that different methods of accounting were adopted by the assessee to recognize the income from different projects. According to him, even the percentage completion method adopted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of section 145. Neither principle nor authority bars an assessee from substituting one method of accounting for another at his choice. A change in the method of the assessee's choice or the application of the first proviso to section 145 (1) [Indo-Commercial Bank Ltd. v. CIT (1962) 44 1TR 22, 36, 37 (Mad); Forest Industries Travancore Ltd. v. CIT (1966) 61 1TR 395 (All); Dr. ITR 329 (Ker); New Victoria Mills Co. Ltd. v. CIT (1966) (ITR) 395 (All); Once. having so changed the method of accounting, if the assessee continues with the changed method, it becomes his regularly employed method within the meaning of section 145(1) and the Assessing Officer is bound to base his assessment on the changed method provided that income can properly be deducted from such method. If, however, the changed method is not followed regularly by the assessee, the taxing authority cannot fall back upon the earlier method of accounting. This is so because in such a case it cannot be said that the assessee had followed the earlier method regularly in view of the intermediary changed method of accounting. Such a case will be a case falling under section 145(2) where no method of accounting has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediary changed method of accounting. Such a case will be a case falling under section 145(2) where no method of accounting has been regularly employed by the assessee entitling the assessing authority to make an assessment in the manner provided in section 144 (Reform r Mills P. Ltd. V. CIT (1978) 114 1TR 227, 230 (Cal)" (v) The assessee has not followed the method of accounting regularly and has been changing the method of accounting from completion method to percentage method and then again, completion method for a particular project, and even in the percentage completion method, the rates are varying from year to year in the same projects. The assessee firm has estimated percentage of profit, which are even different in every year on the same project, and applied the said percentage on the work carried out during the year. (vi) The said method cannot be accepted because it is pt bringing the real income of the respective year for tax. Tax statutes require taxing the real income of the year. The only acceptable and proven method for taxing the income of real estate developer is that estimate of profit has to be made for entire project which is required to be revised ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that where the assessee has substantially realized the construction work carried out by it by making agreements and receiving considerations under such agreements, the taxability of income on such estimation of profit on such receipts cannot be allowed to be postponed. 6.3 The assessee has not offered any profit on the sales consideration/ realisation from the Ganga Tower II project. The income under the percentage completion method discussed here-in-above is required to be computed in respect of the Ganga Tower II project. As has been discussed in the foregoing paragraphs, inspite of opportunities provided, the assessee has failed to or deliberately avoided furnishing the information and evidences regarding the projects called for vide notice u/s 142(1) issued on 10.11.2006. Even whatever sketchy and incomplete information is provided by the assessee, it has been provided only at the fag end of the year just a few days before the limitation date thereby closing all the paths to explore the genuineness of the said information. It is also not clear as to what prevented the assessee from furnishing the required information and producing the relevant evidences including the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de during the year ₹ 1,675 (average of first three and last three bookings Total estimated sales ₹ 12,33,52,750 (45094-31090)* 1675 + 99896050 Total projected cost ₹ 7,89,68,646 As available from Records Total estimated profits ₹ 4,43,84,104 Total cost of project as on 31-03-2004 before profit ₹ 7,26,85,990 92.04% of estimated profits Less: profits declared till 31-3-2003 ₹ 51,50,493 As per assessee's Submissions Profits taxable in this year ₹ 3,57,00,636 7.2 From the above chart, it can be clearly seen that the total estimated sales have been computed taking into account the area already sold by the assessee at the amount of sale consideration shown by the assessee and the additional area has been valued at average bookings price for the year. Thus a fair and just estimate of the total projected sales is made. On this estimate of projected sales, after taking to consideration total projected cost of the project, estimated profits of the project have been computed. But only that portion of the estimated profits is taxed in the year under consideration which bears the same proportion as the cost as on the year ending date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2,67,04,191/-. Since the assessee has concealed the particulars of its income/furnished inaccurate particulars of the income, penalty proceedings u/s 271(1)(c) of the Act are hereby initiated. 9. Atur Park Project 9.1 Regarding the Atur Park Project, the assessee has shown the opening WIP at ₹ 17,63,91486/-. On the additions to the cost of project during the year shown at ₹ 4,96,468/-, the assessee has offered profits @ 12.5% at O697-.oeflsof the total area of construction, projected sales, projected profits, area sold, rate of sale, no. of flats constructed/sold, etc. have been furnished by the assessee. It is gathered from the records that the opening Work-In-Progress includes the WIP of three projects viz. Ganga Tower I, Ganga Estate and Ganga Green. 9.2 The Ganga Green project shows the WIP of ₹ 3,86,96,904/- against which the assessee has shown advances received at Rs.l0,04,31,325/-. During the year under consideration, there has been no addition to the cost of this project. Hence, no profit needs to be computed in relation to this project for the year under consideration. 9.3 In connection with Ganga Estate Project, the position is the same as with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no question left regarding method of accounting to be adopted as the profits of the entire project which was completed during the year were to be compulsorily included in the total income by the assessee on its own. When the book results have been rejected and the project has already been completed, postponement of the taxability of income as per assessee's own convenience is not allowed under the law. 10.4 Hence, the profit of the project is taken at ₹ 3,00,22, 193/- and added to the total income of the assessee. Since the assessee has concealed the particulars of its income/furnished inaccurate particulars of the income, penalty proceedings u/s 271(1) (c) of the Act are hereby initiated." Accordingly, the income of the assessee from the four projects ie. Ganga Tower II, Ganga Tower I, Kukreja Project and Gopala Project was estimated by the A.O. at ₹ 33,635,031/-, ₹ 30,022,192/-, ₹ 26,704,191/- and ₹ 35,700,636/- 3,22,192 & ₹ 2,67,41291/-, ₹ 3,57, 636 respectively in the assessment completed u/s 143(3) of the Income Tax Act, 1961. 7. Against the order passed by the A.O. u/s 143(3) of the Act, an appeal was preferred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no basis for this finding that some times revenue is recognized on the basis of percentage of completion method and some times on the basis of completion method. Regarding the argument of the Assessing Officer on parà 4.3 of his order is that revised Accounting Standard - 7/2002 (wrongly mentioned by the Assessing Officer as AS-7/2 000) issued by the Institute of chartered Accountants of India is applicable on the appellant firm, the learned AR of the appellant stated that this Accounting Standard is applicable only on the Contractors as in the scope of the Accounting Standard, it is clearly mentioned that 'This Statement should be applied in accounting for construction contracts in the financial statements of contractors." The appellant claimed that the firm is not a contractor and not taking any contract for construction. The appellant firm is a builder and constructs residential and commercial buildings for its own purposes, which are sold to the prospective buyers. (c) Regarding the Assessing Officer's allegation that he asked for various lengthy details from the appellant vide his letter dated 10-11-2006 and against that, the appellant supplied part det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit, the learned AR relied on following decisions - (i) Calcutta High Court in the case of Snow White Food Products Co. Ltd. V. CIT -- 141 ITR 861, wherein it has been held that when it is found that an assessee has changed his regular method of accounting by another recognized method and he has followed the latter regularly thereafter, it is not open to the AO to go into the question of bona fides of the introduction and continuance of the change. (ii) CIT v. A.V. Appu Chettiar -- 45 ITR 152 (Madras). In this case, the method of valuation of stock has been changed. New method of stock valuation cannot be rejected merely because there would be loss of revenue in the year of. change. What is relevant is to consider whether the method adopted is one of the recognized methods and further whether the changed method of valuation is followed consistently every year. (iii) CIT V. Delta Plantation Ltd. -- 71 Taxman 329 (Calcutta). In this case, it Is held that change of method should be bona fide and must not be restricted to a particular year. (iv) CIT v. Atul Products Ltd. -- 125 Taxman 727 (Gujarat). In this case, it is held that when an accounting method is changed with a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, the action of the A.O. in rejecting its books of account was also challenged by the assessee by submitting that it had maintained all the books of account which were audited and even the tax audit report was obtained. It was contended that no defect was pointed out by the A.O. in the books of account maintained by the assessee and even the defect pointed out by the A.O. in respect of method of accounting adopted by the assessee was not based on the actual fact of the case. 10. The assessee also filed additional evidence before the ld. CIT(A) in support of its case and filed a letter dtd. 17-06-2007 seeking admission of the additional evidence on the following grounds:- "1. In continuation to the earlier submission, we would like to hereby state that the Assessing Officer further required certain details / documents for assessment vide letter dt. 10/11/06 to furnish in writing and verified in prescribed manner, the information asked on the points and/or matters as per the annexure. 2. The required details as per the above letter has been submitted point to the assessing officer vide assessee's letter dt . 27/11/06, the copy of which was filed along with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revised Accounting Standard AS7 (2002) was notified by the ICAI and made effective from the A.Y. 2004-05 in respect of construction contracts. He was therefore of the view that the assessee should have determined the profits for the year in respect of various projects having regard to the said revised Accounting Standard. He there fore proceeded to estimate the profit for the year on the basis of total estimated sales as prescribed by the revised Accounting Standard. 2. In this regard, it may be mentioned that since the accounting standards have been modified by the Institute of Chartered Accounts, the enterprises engaged in developing & building have to observe the revised standards as notified by the ICAI. The Institute of Chartered Accountants of India have also issued Guidance Note 23 according to which the Accounting Standard (AS) 9 is applicable to the cases of Real Estate Developers, wherein the revenue is to be recognized in the year in which it has been earned and the same cannot be postponed to the future year on the ground of non-completion of projects. 3. It may also be mentioned that the AO, in the course of assessment proceedings, has called for various details as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WIP Gopala 57841957 14844033 20% 2968807 75654797 Atur Park 176391486 496468 12.5% 62058 176950012 Kukreja Plaza 158358429 (Less: WIP of K. Star Hotel -35035247 Net of Kukreja Plaza 123323182 20277538 20% 510325 126385133 Ganga Tower II 31214273 20277538 - - 51491811 It is also seen that the assessee has offered percentage of profit in respect of work executed during the year in the case of the projects during the A. Y.2003-04 & 2004-05 is as under: - Project %age in AY % 2003-04 age in AY 2004-05 Atur Park 12.5 12.5 Kukreja Plaza 12.5 12.5 It is observed from the details tabulated above that in respect of Ganga Tower - II project that no income was declared during the year although the cost of construction of Ganga Tower - II project was considerable. It is al a seen from the above statistics as per the Tax Audit Report that the assessee has not offered any estimated profit in respect of Ganga Tower II project during the year as in the projects Gopala, Atur Park and Kukreja Plaza. It is stated in the Tax Audit Report that the revenue in respect of Ganga Tower -II site will be determined on completion contract basis. In respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. When the remand report of the A.O. was confronted by the ld. CIT(A) to the assessee, the later filed a letter dtd. 16-2-2009 offering his comments on the remand report of the A.O. as under:- "5.16. In para 2 of the remand report, the Ld. AO has again repeated the same observations that we have been determining the revenue in respect of the various projects, sometimes on the basis of project completion method and sometime on percentage completion method, which is patently wrong. Appellants submissions (1) In our written submissions given vide our letter dated 14-3-2007, we have given the complete history of the firm since 1986-87 and wherein we have clearly mentioned that the firm was following the method of decla1ing estimated profit on the basis of percentage of work in progress every year. However, in respect of new projects started from asst. year 2001-02 onwards, the firm has adopted completion method of accounting for computing the profit and because of this reason, the 'Madhuri' project which was started in the asst. year 2001-02 and completed in asst. year 2003-04, the firm has followed completion method and the AO has accepted the same and thereby, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opers wherein the revenue is to be recognized in the year in which it has arisen and as per the said AS-9, revenue is to be recognized when risk and reward are transferred. In the case of the firm, when the projects are under construction, the flats and shops are yet to be constructed and possession is not given to the prospective buyers and, therefore, there is no question of risk and reward being transferred in these years. In view of these circumstances, AS-9 is not applicable on the firm. It is further submitted that even In AS-9, It Is mentioned that- "The Statement is concerned with the recognition of revenue arising in the course of the ordinary activities of the enterprise from - sale of goods - the rendering of services, and - the use by others of enterprise resources yielding interest, roya1ties and dividends." Therefore, AS-9 is also not applicable on the firm. 5.18 In para 4, the AC has mentioned that the firm has not supplied the various details as called for by his predecessor during the course of' the assessment proceedings and again in view of the revised Accounting Standard -- 7, the books of accounts of the firm are rejected and provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 3 project i.e. (i) Gopala; (ii) Atur Park and (iii) K-Plaza. 4. The written submissions regarding the applicability of AS-7 is given in para 3.1 and 3.2 of the written submissions given vide our letter dated 14.03.20O7. Further, regarding non-applicability of AS-9, the written submissions are given in Para 2 of our letter dated .16-2-2009. 5.21 The Appellant vide its letter dated 24th December, 2009, further submitted the following : V U B. Nature of Accounting - SECTION 145 of the I.T. Act 1. Section 145 of the I. T. Act prescribes that the assessee can either follow cash or mercantile system of accounting and that the same system should be followed regularly. 2. In this case, the assessee firm has followed the t4ercn tile system of accounting since inception, for last number of years and the said method has not been changed. 3. Mercantile system of accounting means all the receipts and payments for expenses are accounted on accrual basis and not on receipts basis. The said system is being followed by the assessee firm since inception and has not been changed. 4. In the case of a builder, completion of a particular project takes 'number of years, wherein many bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f computing of the profit in respect of the project which takes number of years to be completed and where there is no certainty of the expenses and receipts. 8. We again submit that till asst. year 2003-04, the department has accepted the method of computing the profit on the projects undertaking by the appellant. Even in respect of the projects in which the appellant was following percentage of work in progress method, which were completed after this asst. year i.e. in asst. years 2005-06 and 2006-07, the department has accepted the profit computed according to the percentage of work in progress method. Even in respect of the projects undertaken after asst. year 2001-02, profit computed on completion method has been accepted by the department in respect of the projects completed in the asst. years 2 005-06. 9. We again repeat that these are the methods of computing the profit in the case of a builder under special circumstances as mentioned above and this Is not a change in the method of accounting as the appellant is always following the mercantile system of accounting all these years." 13. After considering the submissions made by the assessee, the comments of the A.O. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier does not take away his rights to show his profits on project completion method from a particular date. It is not, the case of the Assessing Officer that he has been using one method or the other haphazardly or that in respect of any one project he has been switching from one method to another from year to year. For all projects started before A.Y.2OOf-O2 he had been showing profits on percentage completion method and thereafter he has it is also not the case of the Assessing Officer that substantial part, say 75% or so, of the project got completed earlier than shown by the appellant. It is also not the case of the Assessing Officer that any of the expenses or receipts belong to year other than the one shown by the appellant. No such fallacy or incongruity in accounting of expenses or receipts was proved even during the remand proceedings. 5.23.5 The claim of the appellant that Accounting Standard AS7 is applicable only to the cases of the contractors, is absolutely correct. In a contract system, the payments are received on the basis of work-in- progress V and such receipts are irretrievably earned by the contractors. The applicability of AS-7 is clearly mentioned in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve consistently followed the method of accounting for a project as it has never changed the method from percentage of completion method to completion method and vice versa for a particular project.. The Assessing officer has reached the conclusion under misconceived notions about the facts. 5.20.11 Also Accounting Standard AS -- 7 is not applicable to the appellant since for a builder, the revenue has to be recognized when risk an rewards are transferred. 5.23.12 Considering the facts narrated above, it is held that the Assessing Officer has not been able to prove incorrectness or incompleteness in the accounts of the appellant even during the remand proceedings. The appellant is recognizing revenue when risk and reward are transferred and both percentage completion and project completion are well recognized methods for showing profits by the builders. Therefore, the conditions enumerated in sub-section 3 of section 145 can not be said to have been proved to be violated. The action of the learned Assessing Officer in rejecting the Books of Account of the appellant form u/s 145 of the Income tax Act was, therefore, not justified and the second ground of appeal is allowed according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting the books of accounts of the appellant and consequently, making an estimate of the Income. The appellant has not changed the method arbitrarily by changing the method of estimating the profit at will from percentage completion method to completion method and vice-versa. Under the circumstances, the income of the appellant has to be worked out on the basis of the facts relating to each project. 7.5.4 It is a fact that the profits have been declared on the percentage completion basis in respect of Ganga Tower I Project from the AY 1986- 87 to AY 1994-95 and such declaration of income has been accepted co consistently by the Assessing Officer. If the appellant had under- stated its income in all these years, then the extra income not shown, will get accumulated to be included at the end of the project. Similarly, If it had overstated its income over these years, the appellant would end-up showing less income in the concluding year. In other words, if the Assessing Officer has not found any receipt other than the ones shown by the appellant in all these years, or If he has not proved any inflation of expenses in respect of the project, the over-all income of the project cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manner as he calculated for Ganga Tower II Project. 8.7 Since the Method. of accounting the profit on percentage basos to the cost incurred on the project during the year has been accepted by the ITAT in the case of the appellant as well as group concerns and the facts are identical to the ground No. 4 of this very appeal, the AO is directed to delete the addition of Rs,2,67,04,191/-, being the estimated profit of Kukreja Plaza added by the A.O." Gopala project The Appellant has started the Project in the Assessment Year 1989-90 and from Asst. Year 1989-90 till 2004-05, the firm had declared profit on percentage of work in progress method and when the said project was completed in the Asst. Year 2005-06 i.e. occupation certificate is received the balance profit is declared. The same was also accepted by the Assessing Officer in this subsequent year. But, the learned Assessing Officer did not accept the Appellant's method of computing profit. 9.6 Since the Method of accounting the profit on percentage basis to the cost incurred on the project during the year has been accepted by the ITAT in the case of the appellant as well as group concerns and the facts are identical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... builder and developer for the last 35 years and the project completion method followed by it to recognize the income from various projects up to 31-3-2002 was regularly accepted by the Department. He submitted that the assessee adopting project completion method to recognize the income of the projects started after 31-3-2000 after having found that the same was a better method in the change scenario. He invited our attention to the relevant details furnished by the assessee before the ld. CIT(A) and reproduce page 18 of the impugned order of the ld. CIT(A) to show that the project completion method was found to be no more appropriate to recognize the income of the different projects in the changed marketing conditions. He submitted that the project completion method, on the other hand, was found to be more appropriate and the same accordingly was adopted by the assessee to recognize the income from the projects which started after 31-3-2000. He contended that the methods adopted by the assessee for different projects, however, were consistently maintained by the assessee project-wise and, therefore, the entire income from the said projects was finally assessed to tax. He submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year under consideration, some of the projects under execution had started prior to 31-3-2000 while some of the projects were commenced after 31-3-2000. Since the method adopted by the assessee was consistently followed project-wise, the revenue of the projects which had started prior to 31-3-2000 was recognized by the assessee by following percentage completion method whereas the revenue of the projects which were started after 31-3-2000 was recognized by the assessee by following the project completion method. In our opinion, the method changed by the assessee in respect of project commenced after 31-3-2000 thus was consistently followed by the assessee and as rightly held by the ld. CIT(A), the A.O. was not justified in rejecting the book results of the assessee on the basis of change in the method adopted by the assessee or to different method allegedly followed by the assessee. It was also observed that even the change in the method of accounting adopted by the assessee was properly justified before the ld. CIT(A) by explaining with the help of results of one project to show that how the project completion method was more proper method to recognize the income from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to 31-3-2000 and income from the said project was offered by the assessee in A.Y. 1986-87 to A.Y. 1994-95 by following percentage completion method which was consistently accepted by the A.O. The completion certificate in respect of the said project was finally received by the assessee on 5-11-2004 and accordingly the balance profit of the said project was offered by the assessee in A.Y. 2005-06 which was also accepted by the A.O. The entire income of the said project thus was brought to tax in the hands of the assessee as per percentage completion method consistently followed by the assessee in respect of the said project and the A.O., in our opinion, was not justified in bringing to tax the profit of ₹ 3 crores from the said project in the year under consideration by treating the said project as completed in that year when the said profit was duly offered by the assessee in A.Y. 2005-06 on the basis of completion certificate received and the same was accepted by the A.O. This action of the A.O. also resulted in double addition of the same income in the hands of the assessee which was not justified as rightly held by the ld. CIT(A). Similarly, the profit from Kukreja Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s expenses of ₹ 36,37,375/- is consequential to the main issue involved in ground No. 'a' to 'f' of the Revenue's appeal inasmuch as after rejecting the book results, the A.O. estimated the income of the assessee from the real estate development without allowing any deduction on account of business expenses of ₹ 36,37,375/- incurred by the assessee. The ld. CIT(A), however, held the action of the A.O. in rejecting the book results as unsustainable and deleted the addition made by the A.O. by estimating the income of the assessee from the business of real estate development on higher side. Consequently, he allowed the business expenses of ₹ 36,37,375/- claimed by the assessee holding that there was nothing brought on record by the A.O. to establish that the expenses so claimed by the assessee were either bogus or were not incurred for the purpose of business. Since the impugned order of the ld. CIT(A) deciding the main issue in favour of the assessee upheld by us, the consequential relief allowed by him to the assessee by allowing the deduction on account of business expenses of ₹ 36,37,375/- is liable to be sustained as a corollary. We or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipts from the occupancy of the hotel has been shown at ₹ 18,23,766/-, he held that the assessee was entitled to claim depreciation on the assets put to use for hotel business. He, however, held that the said assets having been used by the assessee for less than 180 days during the year under consideration, the assessee was entitled to claim depreciation only to the extent of 50%. Accordingly, he directed the A.O. to allow the claim of the assessee for depreciation to the extent of 50%. 26. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that sufficient evidence was placed on record by the assessee before the ld. CIT(A) to show that the hotel business was started on 17-1-2004 and the assets thus were put to use for the said business from that date. Neither the A.O. in his remand report submitted to the ld. CIT(A) nor the ld. D.R. at the time of hearing before us has been able to bring anything on record to dispute this position. We, therefore, find no justifiable reason to interfere with the order of ld. CIT(A) directing the A.O. to allow the claim of the assessee for depreciation on the assets put to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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