Disallowance of depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

24 December 2011 The A.O. has disallowed depreciation proportionate to the cost of land claimed on an 'ownership shop' & 'ownership flat' citing that it includes cost of land also. When the properties were purchased by the assessee he did not paid anything separately on behalf of land. A.O. has referred to the judgement taken in CIT vs. AIPS Theatre (1967) 65 ITR 377(SC) and judgement given by ITAT 'D' Bench, Delhi, in the case of DCIT, Circle-3(1), New Delhi vs. Capital Car Pvt Ltd (2008) 114 ITD 286 (Delhi).
Please advise on the same whether contention of A.O. is correct.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 December 2011 In the case of CIT vs Rajesh Exports Ltd 9 SOT 28(Bangalore) it was held that in case of composite agreement of purchase of shop or flat where cost of land can not be ascertained separately , depreciation on the whole amount can be claimed. This is a more recent judgement then the ITO is citing.

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