Commissioner Of Income Tax - 9, Mumbai v. Ellora Resorts Managements Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4258 OF 2009 Commissioner of Income Tax - 9, Mumbai..Appellant. Versus Ellora Resorts Managements Private Limited ..Respondent. Mr.P.S. Sahadevan for the appellant.Mr.Atul K. Jasani for the respondent. CORAM : J.P. Devadhar & Mrs.Mridula Bhatkar, JJ. DATE : 11[th] January, 2011. P.C. : 1.Two questions of law raised by the Revenue in this appeal are as follows : a)Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in confirming the order of learned CIT (A) in directing to allow depreciation of Rs.3.22 lac, on assets which were not owned by the assessee and that the condition that the assets having being put to use is not satisfied, which is in contravention to the provisions of Section 32 of the Act ?Tribunal is justified in law in confirming the order of learned CIT (A) in directing to allow depreciation of Rs.3.22 lac, on assets which were not owned by the assessee and that the condition that the assets having being put to use is not satisfied, which is in contravention to the provisions of Section 32 of the Act ? b)Whether on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the order of learned CIT (A) in deleting addition of Rs.23.61 lac being unexplained cash credit in contravention to the provision of section 68 of the Act ?Tribunal is right in law in confirming the order of learned CIT (A) in deleting addition of Rs.23.61 lac being unexplained cash credit in contravention to the provision of section 68 of the Act ? 2.As regards the first question, the finding of fact recorded by the Tribunal in para-7 of its judgment is that, though the assets in question were initially purchased by Wockhardt Life Sciences Limited for and on behalf of the assessee, the assets in question are recorded in the books of the assessee, the assets are being used by the assessee and the income derived from the assets in question are offered to tax by the assessee. The Tribunal has further recorded a finding that the assessee has ultimately reimbursed the costs incurred on the aforesaid assets by Wockhardt Life Sciences Limited. The Apex Court in the case of Mysore Minerals Limited V/s. C.I.T. reported in 239 ITR 775 (S.C.) has given wider meaning to the words ‘owner of the assets’ and held that the assessee in possession and user of the depreciable assets would be entitled to depreciation. In this view of the matter, no fault can be found with the order passed by the Tribunal in allowing depreciation to the depreciable assets, especially when Wockhardt Life Sciences Limited has not claimed depreciation on those assets. 3.As regards the second question is concerned, the Tribunal in para-11 of its judgment has recorded a finding of fact that the loan amount from Wockhardt Life Sciences Limited has been wrongly treated as cash credit because the said amount is nothing but the purchase price of the assets in question in the form of loan which is payable by the appellants to Wockhardt Life Sciences Limited. Thus, the second question raised by the Revenue cannot be said to be a substantial question of law arising from the order of the Tribunal. 4.The appeal is accordingly dismissed. No costs. (Mrs.Mridula Bhatkar, J.) (J.P. Devadhar, J.)