9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 1030 - AT - Income TaxDepreciation on UPS - 60% as against 15% - Held that - UPS is eligible for deprecation at 60% as relying on DCIT Vs. Indian Overseas Bank 2013 (4) TMI 751 - ITAT CHENNAI - Decided in favour of assessee. Disallowance of expenditure under section 14A read with Rule 8D(2)(iii) - Held that - On a careful consideration of the facts and circumstances of the case, we are not in agreement with the assessee that no expenditure was incurred in managing the portfolio of the assessee. The assessee company is into the business of registrars and share transfer agent. It is not in dispute that management of the assessee company periodically monitors through its Board of Directors about the investments. In such circumstances, it cannot be said that assessee has not at all incurred any expenses in managing its portfolios. Following the decision of REI Agro Ltd. Vs. DCIT 2013 (9) TMI 156 - ITAT KOLKATA , we direct the Assessing Officer to recompute the disallowance under Rule 8D(2)(iii) by taking the amount equal to percentage of the average value of the investment which has given rise to the income which does not form part of total income.
Issues:
1. Depreciation on UPS at 60% vs. 15% allowed by Assessing Officer. 2. Disallowance of expenditure under section 14A read with Rule 8D(2)(iii) of the Act. Issue 1: Depreciation on UPS at 60% vs. 15% allowed by Assessing Officer: The appeals filed by the assessee and the Revenue were against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2006-07 and 2008-09 to 2010-11. The main issue in both appeals was the depreciation rate on UPS, with the Commissioner allowing it at 60% instead of the 15% allowed by the Assessing Officer. The Tribunal considered a similar issue in a previous case and held that UPS is eligible for depreciation at 60%. The Tribunal referred to previous decisions and upheld the Commissioner's order, allowing depreciation on UPS at 60% and rejecting the Revenue's appeal. Issue 2: Disallowance of expenditure under section 14A read with Rule 8D(2)(iii) of the Act: In the appeals for the assessment years 2008-09 to 2010-11, the assessee challenged the disallowance of expenditure under section 14A read with Rule 8D(2)(iii) of the Act. The Assessing Officer disallowed 0.5% of average investments as expenditure attributable to earning dividend income. The assessee argued that no expenses were incurred in managing investments, as they were handled by Wealth Advisors paid by mutual fund companies. The Tribunal noted that the assessee, engaged in registrars and share transfer agent business, monitored investments through its Board of Directors, indicating some incurred expenses. Citing a previous Tribunal decision, the Tribunal directed the Assessing Officer to recompute the disallowance under Rule 8D(2)(iii) based on investments giving rise to income not forming part of the total income. Consequently, the assessee's appeals were partly allowed for statistical purposes, while the Revenue's appeals were dismissed. In conclusion, the judgment addressed the issues of depreciation rate on UPS and the disallowance of expenditure under section 14A read with Rule 8D(2)(iii) of the Act. The Tribunal upheld the depreciation rate at 60% for UPS and directed a re-computation of the disallowance of expenditure based on specific investments.
|
