Assets installed at collection centers of laboratory situated at multiple locations eligible for additional dep.: ITAT

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  • Last Updated on 23 August, 2021

Deduction of tax at source

Case details: Metropolis Healthcare Ltd. v. DCIT - [2021] 129 171 (Delhi - Trib.)

Judiciary and Counsel Details

    • Amit Shukla, Judicial Member and Prashant Maharishi, Accountant Member
    • Mayank Patwari, CA for the Appellant. 
    • S.S. Negi, Sr. DR for the Respondent.

Facts of the Case

Assessee was engaged in the business of providing referral laboratory services and diagnostics services etc. Assessee filed its return of income. Assessing Officer (AO) noted that assessee had claimed additional depreciation on the plant and Machinery. Assessee submitted that it had been claiming such additional depreciation in the earlier assessment year also. There was no disallowance on this account in prior years. However, AO disallowed the additional depreciation claimed on the grounds that assessee had not invested in the industrial undertaking as it was engaged in providing referral and diagnostic services.

Aggrieved by order of AO, assessee preferred an appeal before the CIT(A). The CIT(A) held that depreciation was not available on the asset used at the collection centers at multiple locations. However, in respect of all other assets used for diagnostic and report making, assessee’s claim for depreciation was allowed.

ITAT held

On further appeal, the Delhi ITAT held that the business of pathological testing diagnostic laboratories was the main business of the assessee. Assessee had set up various collection centers at multiple locations. Collection centers were also an integral part of the whole process of the business of diagnostic and report-making central facilities. There was no reason that additional depreciation on those facilities should not be allowed to assessee when revenue had already accepted the claim that assessee was entitled to additional depreciation on the assets installed in the diagnostic center and report-making central facilities. The past assessment record also stated accepting this assessee’s claim, which was not negated by revenue. In view of this, AO was directed to grant additional depreciation on these assets to assessee.

Case Review

List of Cases Referred to

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