9911796707
TMI Blog2025 (3) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying on of the main business of the assessee. Therefore, the assessee is very much entitled for the depreciation on the same and the AO is directed to allow the depreciation. Denial of the claim of depreciation on plant and machinery used for maintaining the garden and club house - A conjoint reading of both the provisions show that the income should be chargeable under the head income from other sources for the claim of depreciation. Since no income has been shown by the assessee, the assessee has not fulfilled the mandatory condition of Section 56(2)(ii) & (iii) and Section 57(ii). Therefore, the action of the AO cannot be faulted with. This Ground is accordingly dismissed. Disallowance of the claim of expenditure which are legal and professional fees, repairs and maintenance of building, repairs and maintenance of plant and machinery, landscaping and corresponding expenses - AO has denied the expenses because according to the AO, all the expenses have to be borne by the lessee i.e., Mars Enterprises and not the assessee - HELD THAT:- We do not concur with this view of the AO since the assessee has been showing the income from royalty as business income and also parking re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unning of hotel and the lessee, Mars Enterprises agreed to pay 5% of the gross turnover of the hotel annually by way of royalty to the lessor i.e., the assessee. 5.1. Vide another agreement dated 24/06/2004 with Mars Enterprises, the assessee agreed to lease land admeasuring 3106.26 sq. mtrs., for a period of 35 years for the construction of club house. The lessee agreed to pay the lessor, fixed percentage of the annual gross turnover of the Club as royalty to the assessee. 5.2. The assessee has been showing the receipt from parking facilities as business income since 2008 and the same has been accepted as such by the AO. However, during the year under consideration, the AO breached the principle of consistency and treated the income as income from other sources. 6. At the very outset, it would be pertinent to consider the decision of the Hon'ble Jurisdictional High Court of Bombay in the case of National Leasing Limited & Ors in Income tax Appeal No. 685 of 2007 & Ors., judgment dated 21/10/2024. The relevant findings read as under:- "26. We also find substance in the contention as urged by Mr. Cama that the Assessing Officer, for almost 11 Assessment Years has consistently h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. [2006] 282 ITR 273(SC), which followed the decision in Radhasoami Satsang Sabha (supra) accepted the rule of consistency. The following observations of the Supreme Court are required to be noted:- "15. The question in Radhasoami Satsang v. Commissioner of Income-tax [1992] 1 SCC 659; [1992] 193 ITR 321 (SC) (also cited by the State of U. P. was whether the Tribunal was bound by an earlier decision in respect of an earlier assessment year that the income derived by the Radhasoami Satsang, a religious institution, was entitled to exemption under sections 11 and 12 of the Income-tax Act, 1961. The court said: "We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year, unless there was any material change justifying the Revenue t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch entitled for the depreciation on the same and the AO is directed to allow the depreciation. 10. The next grievance relates to the denial of the claim of depreciation on plant and machinery used for maintaining the garden and club house. 10.1. The assessee has installed plant and machineries for the maintenance of the swimming pool and the club house and claimed depreciation on the same. The claim was denied because neither the assessee has shown any income on letting out of plant and machinery nor it is the owner of the swimming pool/garden/club house. 11. Section 57(ii) of the Act read as under:- "Deductions. 57. The income chargeable under the head "Income from other sources" shall be computed after making the following deductions, namely :- ************************ ************************ (ii) in the case of income of the nature referred to in clauses (ii) and (iii) of subsection (2) of section 56, deductions, so far as may be, in accordance with the provisions of sub-clause (ii) of clause (a) and clause (c) of section 30, section 31 and 79[sub-sections (1) 80[***] and (2)] of section 32 and subject to the provisions of 81[section 38] ;" 11.1. This has to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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