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National Housing Bank, Core-5 A, India Habitat Centre, Lodhi Road, New Delhi Vs. ACIT, Circle-26(2), New Delhi
October, 23rd 2021




ITA No.4358/Del/2018

Assessment Year : 2013-14

National Housing Bank, vs ACIT,

Core-5 A, India Habitat Circle-26(2),

Centre, Lodhi Road, New Delhi

New Delhi-110003.



Appellant by Sh. Kamal Bansal, Adv.

Respondent by Sh. Gourav Pundir, Sr.DR

Date of Hearing 07.10.2021

Date of Pronouncement 21.10.2021



This appeal filed by the assessee for the assessment year 2013-14 is
directed against the order of Ld. CIT(A)-22, New Delhi dated 13.03.2018. The
assessee has raised following ground of appeal:-

1. “That the Ld. CIT(Appeal), New Delhi has erred both on law as well
as on facts, while affirming disallowance of depreciation of
Rs.33,98,755/- made by Assessing Officer being part of depreciation
claimed by the assessee on account of office premises at India Habitat
Centre. The notes to accounts brought out the fact that the title deeds in
respect of the office premises have yet to be executed. The bank has
claimed depreciation at the applicable rates as per Income Tax Rules on
the amount paid as cost of premises.

That the appellant craves the leave to add, modify, amend or delete any
of the grounds of appeal at the time of hearing.”
ITA No. 4358/Del/2018

2. The solitary grounds of the assessee is against the confirming of
disallowance of depreciation of Rs.33,98,755/-.
3. Facts giving rise to the present appeal are that the assessee had filed
return declaring total income of Rs.6,44,17,60,620/- on 30.09.2013 through
electronic mode. The case of the assessee was selected for scrutiny under
CASS. Thereafter, the Assessing Officer proceeded to make assessment u/s
143(3) of the Income Tax Act, 1961 (“the Act”). Thereby, the Assessing Officer
by invoking the provision of section 14A of the Act, made disallowance of
Rs.1,90,72,214/- and further made addition of Rs.33,98,755/- on account of
disallowance of depreciation.
4. Aggrieved against this, the assessee preferred appeal before Ld. CIT(A)
who after considering the submissions, partly allowed the appeal. Thereby,
Ld.CIT(A) deleted the disallowance made by invoking the provision of section
14A of the Act. However, the addition in respect of disallowance of
depreciation was sustained.
5. Aggrieved against this, the assessee is in appeal before this Tribunal.
6. At the outset, Ld. Counsel for the assessee submitted that the issue is
squarely covered in favour of the assessee by the earlier decision of the
Tribunal in ITA Nos. 536 & 6888/Del/2014 vide order dated 28.03.2019.
7. Ld. Sr. DR fairly conceded the fact that the issue is squarely covered in
favour of the assessee by the decision of the Tribunal.
8. We have heard the rival contentions and perused the material available
on record. We find that the Assessing Officer in para 4.3 of the assessment

Page | 2
ITA No. 4358/Del/2018

order has followed earlier years decision of their respective predecessors by

observing as under:-

4.3. “The reply of the assessee has been duly considered but it is found
not to be acceptable. The assessee company has not given the bifurcation
of depreciation of land and building and claimed the depreciation on
entire value of premises, thus, the disallowance of depreciation is made
accordingly as per last year's assessment order for A.Y 2012-13 made
by the AO and on the similar lines, the disallowance of depreciation of
Rs.33,98,755/- is made and added to assessee's total income.”

(Addition of Rs.33,98,755/-)

9. We also find that the Ld.CIT(A) in paras 6.3 & 6.4 of the impugned

order has followed earlier years decision of their respective predecessors by

observing as under:-

6.3. “The issue came up for A.Y. 2012-13 as well and the Ld. CIT(A)
uphold the addition made by the AO. The decision of CIT(A) for A.Y. 12-
13 is based on a decision of his predecessor CIT(A) for A.Y. 11-12 in
which a detailed discussion has been made. The Ld. CIT(A) while
deciding the appeal for A.Y. 11-12 vide order dated 12.09.2014 held as

"The issue in respect of segregation of the purchase consideration
of the property into two, land and building vis-a-vis consequential
working of deprecation. The appellant also admitted that the
seller/HC has not segregated the cost amongst building and land.
It is hereby held that the appellant's case is squarely covered by
the decision in the case of Alps Theatre (Supra). In view of the ratio
laid down in this decision, alps theater, I am of the considered
view that the word ‘Building’ does not include land beneath it.
Therefore, the AO, in principle, is held justified in segregating the
purchase consideration of the above mentioned property into two:
land and building vis-a-vis consequential working of the
deprecation on the WDV of the block of asset, Building (50% of the

Page | 3
ITA No. 4358/Del/2018

cost of the premises is treated to belong to land.] resulting
consequential disallowance of depreciation of Rs.40,44,605/ -.
Accordingly, the disallowance of depreciation Rs. 40,44,605/- is
sustained. '"

6.4 After going through the order of the AO submission of the
appellant and order of my predecessor. I uphold the addition made by
the AO. However, the AO is directed to compute the figure of
disallowance as per the decision of Ld. CIT(A) for A.Y. 2012-13. Hence,
the ground of appeal is dismissed.”

10. We find that the decision of Ld.CIT(A) was over-turned by the Tribunal

by holding as under:-

26. “Ld.AR for the assessee contended that in the absence of any
segregation of value of land, deprecation has been claimed on the basis
of total cost paid to India Habitat Centre because land is also leasehold
being subject to amortization and effectively the total cost paid for the
premises will be considered for amount of depreciation. Ld.AR relied
upon the decision rendered by the Coordinate Bench of the Tribunal in
CIT vs Rajesh Exports Ltd. (2006) 9 SOT 28 (Bang.) which has further
than relied upon by the Co-ordinate Bench of the Tribunal in case of ITO
vs Millennium Spire India management (P)Ltd. ITA No.3297/Del/2013.

27. Operative part of the aforesaid decisions rendered by the
Coordinate bench of the Tribunal in CIT vs Rajesh Exports Ltd. (supra) is
extracted for ready perusal as under:-

“Under section 32(1) of the Act, the word “building” is to be
interpreted as the superstructure and not land. Where the
assessee purchases building and the purchase price (as per sale
deed) is a composite one (sale deed does not indicate the prices of
land and building separately), then no distinction at least in the
consideration paid to the vendor can be made. However, if there is
a clear-cut identity in respect of price paid to the land and building
(i.e., sale deed indicates price of land and building separately),

Page | 4
ITA No. 4358/Del/2018

then Assessing Officer is right in allowing depreciation only on the

28. In this case also, when the assessee bank does not have any
segregation value of land and building of the said premises and it has
paid composite price, the entire deprecation claim is allowable under
section 32 of the Act. So, following the aforesaid decision rendered by
the Co-ordinate Bench of the Tribunal in CIT vs Rajesh Exports Ltd.
(supra), and when it is categoric case of the assessee that the purchase
price of land and building is composite one and it has no segregation of
value of land and building separately, disallowance made by the
Assessing Officer/CIT(A) is not sustainable in the eyes of law. SO,
Ground No.5 to 8 of ITA no.6888/Del/2014 (Assessment Year 2011-12)
of assessee’s appeal is determined in favour of the assessee.”

11. The Revenue has not brought to our notice any other contrary binding
precedents to our notice. Therefore, respectfully following the decision of the
Co-ordinate Bench in ITA No.6888/Del/2014 (supra), we hereby direct the
Assessing Officer to delete the addition.

12. In the result, appeal of the assessee is allowed.

Above decision was pronounced on conclusion of Virtual Hearing in the
presence of both the parties on 21st October, 2021.

Sd/- Sd/-
*Amit Kumar* ITAT, NEW DELHI
Copy forwarded to:
Page | 5
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)

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