I v" T5.47.20Ln Present: Mr. Anupam Tripathi, Revenue. +cM APPr_. I.2337/2OLJ. t, Sr.. Standing i J t. ' Exemption allowe.d subject to just exception. Application stands disposed of. ITA 838/20r"n ' Four issues are raised in this appeal.' The first issue relates to the penalty/damages paid by the assessee to NDMC after acquiring the property i.e. Hotel l(anishlca i under the disinvestment policy of cov[. of lndia and claim of depreciation thereof has been decided'iri favorr of the assessee I and against the Revenue in lrA 83712011 decided on 14tn July,'2011. : The second issue pertains to the."depreciatiorr @ 60% as claimed by the assessee as against 25di, which according to the Revenue is cori-ect rate. This issue also dtands decided against the Revenue by this court in commissronrer af, Incorne Tax Vs. BsEs Yarnana p@wer [-t'd,( lrA L26712010 decided on 31't August, 2010). The third issue is in respect of a sum of TL,22,2551- disallowecl by the Assessing officer on account of late deposit of pF and of t I ]-3,5921- on account of unpaid bonus disallowed by the Assessing Officer under Section 438 of the lncome-{ax Act (hereinal'ter would zs# Counsel for the { ,l.v Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified @-- be referred to as'the Act'). lt is not in dispute that the aforesaid payment was made,by filing the returns. ,ln such circumstances, as decided by this Court in a number of cases, such an expenditure ; was allowable expenditure. The last issue concerns the interest. of {1,16,201/- earned by I the assessee on FDR which the assessee had reduced from pre- .. operative expenses. The Assessing officer treated the same as "income from other source", The CIT (A) allowecl the claim of the assessee which order is upheld by the Tribunal. lt has come on :' record that the assessee company was engaged in renovation of Hotel Kanishka acquired from the lrDC. During this period, the assessee had imported raw material under EPGCG licenses having ! reduced rate of import duty, for renova,tion of Hotel. since the aforesaid material was imported under EPGCG licenses with reduced rate of import duty, the assessee was required to furnish the banl< guarantee. The bank guarantee was furnlshed. lt was under these circumstances, the money was to be kept,in FDR with the banl<. ,' In view of this, we are of the opiniori that the lrAT rightly held that the earning of the said interest on thbse FDRs was inextricably linked with the setting up of the businbs5 and would be treated as : a part of the pre-operative expenses. {t I ( I It (. ,l I In these circumstances, the expenses were pre operative expenses incurred by the assessee to reduce the cost of ' construction. , We thus do not find any merit in any of the issues raised in this appeal and is accordingly dismissecl, +CM APP[-. L234O/2Ox1. in IT'A 839/2O]i.L Exemption allowed subject to just e>rception. Application stands disposed of. : I +[TA 839/2O1n All the four issues raised in this appeal are identical as raised ;. in ap,peal pertaining to the assessilg year 2004-05 (lTA B3B l20LL). This appeal is also dismissed. . r, +CM ApP[-. L2343/201]. in tTA Brrr./zo"j,I Exemption allowed subject to just exception. Application stands disposed of. +tTA E/SL/20L!. ' Apart from the two issues which ape covered by the orclers passed 'in ITA 837/2OIL on 14th July, 20It and in the afore mentioned appeals, the additional issue raised in tlris appeal pertains to the expenditure incurred on landscaping. The assessee had debited a sum of t33,20 ,4L7/- on this account and had claimed I the depreciation thereon. The question was as to whether this a _-_-.-_]r-- .7 @v expenditure can be treated as part building and can be capitalized for the purpose of depreciation. The answer given by ttre ITAT is in affirmative with the following discussion:- "We have carefully consider'ed the rival contentions and gone throuigh the record . including the discussion in the impugned order. The term 'building' has not been defined in the Act. The mature of the asses has to 'be ascertained and we have to understand the 'meaning of the term 'buildiflg'f depending upon the context to which a reference'has been made. Here the assessee is in a Hotgl business. His building is not merely a structLre of four walls nut includes all such things as are necessary to give the building a better look and is a matter of attraction for the customers to use it. Having regard to the assessee's natuFe of business it cannot be said the landscapirig done by the assessee cannot be considered as a buildirrg. After all the assessee has given a better.lool< to this building by provision of !his landScaping which has become an integfal part of the building to be used as a Flotel. In order to acquire a Star category, all these artistic looks are very much necessary. The pommissioner, in our view, has correctly applied the principal laid down by the jurisdictional High rlourt in the case of CIT Vs, Delhi Airport Service, 255 ITR 90 and also the decision of the Suprepe Court in CIT Vs. Gwalior Rayon Silk Mfg. Co. Ltd.l'196 tTR 149 and the decision of the Madras High Court I CIT Vs. Solution Petro Chemicals lndustries Corporation Ltd, 233 ITR 391 to give "an extend and more meaningful definition of the terrn 'building'. We agree his view and decline to interfere on this ' aspect of the matter. Moreover it must be appreciated the revenue has actepted the order of the CIT (A) for the assessmdnt yea r 2006-07 and it has only challenged thpt issues in the ' assessment year 2007-08 whicli is second year " which is the year of consequence of the decfsion in the first year which remains unchallenged. lrr other words, the department having aicepted i ot t' -v I t -t \ t I ,: the finding of the CIT (A) for the assessment year 2006-07, cannot question.the same while giving effects to that in the dssessment year 2007-08. Even on this grounp we decline to interfere with the order of the llT (Appeals) for the assessment year 2007-08 on the disputed matter." As noted by the ITAT, the CIT (A) hael accepted the plea of the i assessee in respect of the assessment year 2006-07 as well and i allowed the depreciation by inclusion of, the aforesaid sum in the i cost of building. The Revenue had not challenged this issue in the : said assessment year. Once the amount is spent and allowed to be cost of building depreciation allowed in the year 2006-07, there is no reason to disallow the depreciation in the subsequent year. i We find no merit in this appeal whiclr is accordingly dismissed. CM AFFL. L234.4/2OX.3. in ITA 84L/2OL& i Exemption allowed subject to just exkeption. : Application stands disposed of. , lTA 84L/201L ;t {.i ,: One additional issue which is rrisLO in this appeal by the l assessee relating to assessment year l2oo7-oB relates to the ;. addition made by the Assessing Officer involcing the provisions of section 41 (1) read with section 28 or tlie Income-Tax Act. The Assessing Officer had noticed that certainrcreditors who had to tal<e the money from the assessee had not *LOu their claims for more (@ I 'i than three years and those accounts have Oecome non-operative. On this basis, he concluded that the liability had ceased to exist and, therefore, it was a gain to the assessee and made additions on this ground. The Tribunal has deleted the bOOition taking note of the i fac.t that merely because three years have passed the liab.ility is not .; seized to exist, moreso, when the assessee was still showing that liability in its books of accounts. I We do not find any infirmity in the clrder of the Tribunal. This appeal is also dismissed. @ (/ -@ ,-'1 ,,I ,I , Iffiu\lit^-' 'l "--:t- AIK: 5[KR[, j" tu M.[-"ME[-ffT'A, J. July L5, 2(}iL skb (,,