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TMI Blog2013 (7) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was accepted by the Assessing Officer in the order passed u/s.143(3) on 16-11-2005. Subsequently, a notice u/s.148 of the Income Tax Act was issued and served on the assessee on 31-03-2010. During the course of assessment proceedings the Assessing Officer noted that as per the provisions of the Income Tax Act no depreciation was to be allowed on building used for the business purposes unless the building in question was complete in all respect and fully used for the purpose for which it was envisaged. He observed that the assessee company during the A.Y. 2003-04 has claimed depreciation of ₹ 23,00,596/- on Hospital building which was incomplete. 2.1 On being questioned by the Assessing Officer the assessee submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year jumped to ₹ 1,27,28,062/- form ₹ 26,88,092/- in the preceding year. This could not have been achieved without use of proper building and equipment. The assessee in the assessment proceedings has furnished elaborate particulars with regard to the building also the facilities available in the hospital giving particulars of use of various part of building The assessee was facing a liquidity crunch and was not able to complete the access to the building and finishing work of the entrance. Hence, the completion certificate could not be obtained at the relevant time. However the hospital building otherwise was complete in all respects and fully utilized for the purpose of business. In fact the building has been certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the income returned and assessed U/s 143(3) 2.2 However, the Assessing Officer was not satisfied with the explanation given by the assessee since the hospital building is not fully completed and since the completion certificate has not been obtained from the local authority. The Assessing Officer accordingly disallowed depreciation of ₹ 23,00,596/- . 3. In appeal the Ld.CIT(A) allowed the claim of the assessee by holding as under : 4.3 I have considered the submission made by the appellant and also perused material on record, in order to avail depreciation one should satisfy the following conditions: 1) Asset must be owned by the assessee. 2) It must be used for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial owner for liability as well as any deduction. It took the view that, such view is clear, equitable and consistent with justice and such a view cannot be lightly dismissed, while the Finance Act, 1987 recognised beneficial ownership for computation of property 'income for income-tax, capital gains tax, wealth-tax and gift-tax, the need for clarification in respect of depreciation allowance was overlooked. The controversy got settled in respect of right to depreciation for beneficial owner in the decision, of the Supreme Court in the, case of Mysore Minerals Ltd. oiled supra and also relied upon by the appellant. The concept of ownership in different context now gets reconciled consistent with earlier decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax (Appeals) grossly erred in failing to appreciate that except for the contention regarding quantum jump in the turnover, no substantive evidence was produced by the assessee to prove that the entire newly constructed building was actually put to use for the purpose of business. 4) For these and such other grounds as may be urged at the time of the hearing, the order of the learned Commissioner of Income-tax (Appeals) may be vacated and that of the Assessing Officer be restored. 5. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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