9911796707
TMI Blog2025 (1) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... income from house property after claiming deduction @30% under Section 24 - HELD THAT:- From the assessment records, there is no discussion on this aspect as well that it was the assessee who was effectively using the rooms for it s business purposes for the entire part of the year. Therefore, in our view, the PCIT has correctly observed that the very basis of disallowance was on an incorrect understanding of facts by the AO, which resulted from evident of lack of enquiry on this aspect, during the course of assessment proceedings. The Counsel for the assessee cited various judicial precedents in it s support. It is a well-established principle that each case is rendered on it s own set of facts and cannot have general applicability to other cases, unless there is an absolute parity of facts. Decided against assessee. Judicial precedents cited by the assessee have no applicability to the above set of facts, which are peculiar to the assessee only. Accordingly, the judicial precedents relied upon by the assessee would be of no assistance, looking into the assessee s set of facts. PCIT has correctly observed that the assessment order was framed on an incorrect presumption of facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject was Rs. 15,51,00,000/- against which the assessee had incurred cost of only Rs. 13,50,69,538/- as on 31.03.2017. Since, the project was completed and entirely sold during the year, therefore, the revenue realized of Rs. 17,83,06,286/- and total expenditure of Rs. 13,50,69,538/- were required to be treated as final revenue realized and final cost of the project. However, PCIT observed that as against the revenue realized of Rs. 17,83,06,286/-, the assessee has offered revenue only of Rs. 15,52,60,818/- till 31.03.2017. Accordingly, the difference of Rs. 2,30,43,468/- (Rs. 17,83,06,286 Rs. 15,52,60,868/-) should have been offered for taxation by the assessee as Revenue for the impugned assessment year. Since, the total expenditure incurred on the project was Rs. 13,50,69,538/- which was already claimed by the assessee by offering revenue of Rs. 15,52,60,818/- and since the project was fully completed and sold, therefore, the differential revenue of Rs. 2,30,45,468/- was required to be offered for taxation by the assessee during the impugned year under consideration. However, while finalizing the assessment, Assessing Officer has neither made addition on this issue nor made any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the Revenue. However, while passing the 263 order, the Ld. PCIT has not dealt with this aspect submitted by the assessee while holding the order to be erroneous and prejudicial to the interest of the Revenue. Further, we observe from the records placed before us that the Assessing Officer had made due enquiries with regards to the methodology of revenue recognition adopted by the assessee and there is apparently no lack of the enquiry on part of the Assessing Officer, on this aspect. Accordingly, looking into the facts of the instant case, we are of the considered view that so far as this issue is concerned, the assessment order cannot be held to be erroneous, in so far as prejudicial to the interest of the Revenue. 8. In the result, Ground No. 1 of the assessee s appeal is allowed. Ground No. 2: Disallowance of proportionate depreciation claim by the assessee: 9. During the course of 263 proceedings, PCIT observed that the Assessing Officer had made addition of Rs. 6,20,506/- on account of depreciation on building, out of total depreciation of Rs. 20,68,353/- claimed by the assessee. The Assessing Officer noted that assessee had let out some portion of the building and offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oor, along with furniture and fixture. Accordingly, depreciation on the remaining let out assets is not allowable, since assessee earned rental income thereon and accordingly, depreciation was required to be disallowed thereon. However, on perusal of the case records, PCIT noticed that while finalizing the assessment, the Assessing Officer has not made any verification or enquiry on the above issue, which should have been made during the course of assessment proceedings. Accordingly, the assessment order was held to be erroneous and prejudicial to the interest of the Revenue. 11. Before us, the Counsel for the assessee primarily reiterated the submissions made before the PCIT. The Counsel for the assessee drew our attention to the fact that the assessee had earned a sum of Rs. 39.92 lakhs as Revenue from club activities. The Counsel for the assessee drew our attention to notice dated 26.12.2019 by the Assessing Officer asking the assessee to justify as to how the assessee has claimed deduction under Section 24 of the Act as well as depreciation with respect to the same property. In response, the assessee replied to the same, in which the assessee submitted that the assessee has let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as it s business is also not the issue for consideration before us, since the same is not emanating from the directions / observations made by the PCIT in the 263 order. The limited issue for consideration before us is that whether the Assessing Officer has correctly computed the quantum of disallowance of depreciation. The Assessing Officer was of the view that since the ground floor area had been let out, which constituted about 30% of the total constructed area, the assessee is not eligible for claim of depreciation with respect to this portion which had been let out. However, PCIT observed that on a bare perusal of the rent agreement, it is evident that the assessee had not only let out the ground floor, but also the pearl hall at second floor, eleven guest rooms at first floor, open terrace adjoining the Pearl hall and other furnitures and fixtures as per Annexure-A to the rent agreement . However, while disallowing the claim of the assessee with regard to claim of depreciation, this part of the area which had been let out, was not taken into consideration by the Ld. AO while disallowing depreciation. The claim of depreciation has been disallowed on the basis that only th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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