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TMI Blog2022 (7) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... ar to the guesswork of the AO de hors the facts on record which show that these are temporary furnishing and fixtures in its premises. Such expenditure were duly held to be allowable in the matter of Girdhari Dass Sons [ 1975 (4) TMI 19 - ALLAHABAD HIGH COURT] , and in the case of Peri India Pvt. Ltd. [ 2016 (5) TMI 426 - ITAT MUMBAI] . Accordingly, we set aside the orders of authorities below on this issue and decide the issue in favour of the assessee. Disallowance of depreciation - as argued the Appellant company engage in the business of tour and travel and vehicles have actually been used for carrying the travelers - HELD THAT:- We find that the orders of authorities below in denying depreciation @ 30% on commercial vehicles being used by the assessee in operating touring services leaves no doubt that Revenue authorities have failed to apply any mind. Moreover, even after submitting the RC Book of registration as taxi, ld. CIT (A) has made a bizarre remark that it was obtained with ulterior motives without any material having been brought on record. It is also noted that such depreciation rate was allowed in succeeding years i.e. AYs 2015-16, 2017-18 u/s 143(3). Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant company engage in the business of tour and travel and vehicles have actually been used for carrying the travelers. 3. That the Learned Commissioner of Income Tax (Appeals)-22, New Delhi, has erred in law as well as on facts while confirming disallowance of loss incurred on foreign exchange amounting to Rs. 14,404/- by disregarding verdict of Hon'ble Supreme Court in CIT Vs Woodward Governor India Pvt Ltd. [312 ITR 254]. 4. That the Learned Commissioner of Income Tax (Appeals)-22, New Delhi has erred in law as well as on facts and in circumstances of the case in confirming action of the AO in treating legal professional expenses as capital nature and allowing only depreciation for the part of the year. 3. Apropos ground no.1 : Brief facts of the case are that the assessee company was engaged in the business of inbound tours and provides tour and travel services to foreigners coming to India. The Assessing Officer (AO) observed that during examination of the case, it was noticed from the schedule of fixed assets as filed with the revised return that there was an addition of Rs.16,28,357/- shown under the head of Temporary Structure and depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an in the case of temporary structure. First of all it is to be noted that the rule 1 of Appendix 1 of the Income Tax Rules, deprecation @ 100% is allowable on, temporary erection. Under the head temporary erection, the legislature has given an example of wooden structure. By giving an example of wooden structure, the legislature makes it clear that if the life span of an erection is short, it should be called a temporary erection, otherwise it may fall under the head part of building or furniture and fittings on which deprecation at 10% is allowable. In the instant case, the assessee might have incurred certain expenditure on wooden partition, on which deprecation @100% is allowable. However, no bifurcation of the same has been submitted by appellant and appellant only argument that since it is a rented premise therefore, depreciation @100% may be allowed. Under the head legal Professional charge the appellant has made an payment of Rs.l,80,000/ - to Aprajita Davar for Designing the office. The payment is appearing in the ledger account of appellant under the head temporary structure - building. It means the payment is made for designing the office for which the alleged temporar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m/2014. Accordingly, we set aside the orders of authorities below on this issue and decide the issue in favour of the assessee. 9. Apropos issue relating to disallowance of depreciation : On this issue, it was noticed by AO that in the revised return of income, the assessee had claimed deprecation @ 30% in respect of motor vehicle commercial. AO rejected the rate of depreciation of 30% on the ground that assessee was not in the business of running or hiring of vehicles. Ld. CIT (A) found that AO has stated that assessee is engaged in the business of tour and travel services and higher rate of depreciation has been claimed being used as commercial vehicles but assessee has failed to establish that these vehicles are used for running on hire. Before him, assessee submitted RC book of two Innova Vehicles registered as Taxi one in Delhi and other in Jabalpur. Ld. CIT(A) observed that this submission is not sufficient enough to controvert the finding of the AO. He made a bizarre remark that sometimes person get vehicle registered as Taxi to get some other benefit. Accordingly, he confirmed the addition. 10. Against this order, the assessee is in appeal before us. We have heard bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made out that the claim of assessee is not in consonance of this exposition. Hence, respectfully following the precedent, the assessee s ground is allowed. 16. Apropos treatment of legal professional expenses as capital in nature. On this issue, AO noted that assessee has paid Rs.1,80,000/- under the head legal professional charges in the name of Aprajita Davar. It was explained that a sum of Rs.1,80,000/- was paid for new office to Aprajita Davar for interior designing consultancy and project execution of commercial space. AO observed that this expenditure appeared to be related to additions of fixed assets claimed as temporary structure already added by him. He held that the same is capital expenditure and allowed depreciation accordingly. Ld. CIT (A) confirmed the said order. 17. Against this order, the assessee is in appeal before us. We have heard both the parties and perused the record. 18. We note that we have already set aside the orders of the authorities below on the issue of interior expenditure on interiors held by the authorities below as capital in nature herein above. On the same reasoning, this expenditure is also allowable as revenue expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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