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TMI Blog2017 (10) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... On Ground No.1, assessee challenged the order of the Ld. CIT(A) in allowing only 50% of the depreciation amount of Rs. 1,98,022 out of the total amount of Rs. 3,96,022. 4. Briefly, the facts of the case are that assessee filed return of income declaring income of Rs. 1,25,786. During the year assessee- company had not carried out any business and had done some investment activities. The main object of the assessee is running of educational institutes to promote the education. In view of the fact that since the assessee had not carried out any business during the year, the A.O. disallowed the expenses claimed by the assessee. The A.O. further noted that assessee had claimed liability of Rs. 3,60,000 and Rs. 555 on account of security fees. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee was carrying on business activities till the year 2009-2010 and it was only thereafter, the activities were temporarily suspended. These activities were finally stopped in September, 2011 when assessee became partner in some other concern for the same activities. In these circumstances, the expenses incurred by the assessee till the closure of the business i.e., September, 2011 is an allowable expenditure. The Ld. CIT(A) accordingly allowed business expenditure of Rs. 1,38,585. Further, the assessee had claimed depreciation on fixed assets amounting to Rs. 3,96,044. Ld. CIT(A) noted that since the business of the assessee was finally stopped in September, 2011, so depreciation is allowable only for half of the year. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome partner in another partnership firm. Therefore, for half of the period, depreciation was rightly allowed for 50%. The submissions of the parties in the light of finding of fact recorded by the Ld. CIT(A) clearly prove that assessee is not entitled for 100% depreciation. It is an admitted fact that assessee is a Company and stopped its business activities on 20th September, 2011 when the assessee entered into the Limited Liability Partnership Agreement (LLP) with many parties and agreed to form the LLP in the name and style of "IILM Enterprise, LLP", business would be carried out in the name of the new LLP. It was, therefore, proved that assessee company discontinued its business permanently and through the execution of LLP agreement d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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