Allowability of Depreciation on Server, storage and accessories procured by aasessee on lease
Short Overview assessee claimed depreciation on new server, storage and accessories procured during the year on lease and the assessee incurred cost of such asset and was also paying interest on lease; the assessee would be eligible to claim such depreciation.
AO disallowed assessee’s claim of depreciation on server, storage and accessories procured during the year on lease. Assessee submitted that it incurred cost and also paid insurance premium on the asset. Therefore, assessee was the owner of the asset and eligible to claim depreciation. Further, he submitted, the interest paid on lease had been allowed as business expenditure by the AO
It is held that As regards the claim of depreciation on new server, storage and accessories procured during the year through lease agreement, the assessee incurred cost of such asset. Further, the assessee was also paying interest on lease. AO, though, disallowed the depreciation; however, he allowed interest paid on lease as business expenditure. Further, there was no noticeable difference between the ownership status of the server purchased earlier and the server purchased during the year. Moreover, the claim of depreciation on newly acquired asset was allowed by the AO himself in subsequent assessment years. Hence, the assessee was eligible to claim depreciation on the newly acquired server, storage and accessories during the relevant assessment year also.
Decision: In assessee s favour
IN THE ITAT MUMBAI ‘B’ BENCH
PRAMOD KUMAR, V.P. & RAVISH SOOD, J.M.
Dy. CIT v. BSE Ltd.
ITA No. 1048/Mum/2020
A.Y. 2015-16
21 September, 2021
Appellant by: Tharian Oommen
Respondent by: Niraj D. Sheth
ORDER