Assessee entered into a lease deed with SIPCOT, a State Government undertaking, towards the lease of a plot in an industrial park promoted by it. As per the lease deed, a plot was allotted to assessee on a long-term lease of 99 years. Assessee paid a certain amount towards plot deposit and also a sum towards development charges. Assessee claimed depreciation on the amount paid towards development charges. Assessing Officer disallowed the claim, holding that the amount paid to SIPCOT was only for the purpose of land development and rights obtained by assessee were only towards land and, therefore, the claim of depreciation was not allowable on building. Tribunal affirmed the order of the Assessing Officer. On appeal, the Court held that since the assessee had only a long-term leasehold right over infrastructural facilities and was not an owner either wholly or partly, the claim of depreciation was rightly disallowed. \u00a0As regards development charges, the court held that development facilitated the running of business, which was an essential requirement without which business could not be operated; hence, the contribution made by the assessee was eligible to be treated as a revenue expenditure. \u00a0(AY. 2006-07 to 2014-15)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 32 : Depreciation-lease of plot-Long-term lease of 99 years-Plot deposit-Depreciation not allowable. [S. 32(1)(ii), 260A]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-60536","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fKo","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=60536"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60536\/revisions"}],"predecessor-version":[{"id":60537,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60536\/revisions\/60537"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=60536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=60536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=60536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}