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2013 (4) TMI 380 - AT - Income TaxDepreciation claim for on intangible assets acquired in earlier year - Held that - Decided against assessee as relying on assessee s own case for the A.Y.2000-01 Disallowance u/s 14A - Held that - AO is directed to calculate disallowance u/s. 14A as directed by the CIT(A), considering decision of in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) Disallowance u/s 40(a)(ia) - TDS not made on Courier charges, Transport expenses, Audit Fees, Labour charges - Held that - Sec.40(a)(ia) were not applicable to year end payments - in favour of assessee.
Issues:
1. Disallowance of depreciation on intangible assets. 2. Disallowance u/s.14A of the I.T. Act. 3. Addition u/s.40(a)(ia) of the Act. Issue 1: Disallowance of Depreciation on Intangible Assets The appellant claimed depreciation on intangible assets, but the Assessing Officer disallowed the claim based on a previous decision by the ITAT. The First Appellate Authority upheld the decision. The ITAT found that the issue had already been decided against the appellant by the H Bench and, therefore, decided against the appellant. Issue 2: Disallowance u/s.14A of the I.T. Act The Assessing Officer disallowed Rs. 34,48,057 u/s.14A as the appellant had made tax-free investments. The FAA directed the AO to calculate the disallowance based on specific investments. The ITAT directed the AO to consider additional factors mentioned by the AR while calculating the disallowance, leading to a partial allowance of this ground of appeal. Issue 3: Addition u/s.40(a)(ia) of the Act The AO disallowed an expenditure of Rs. 76,85,323 under Sec.40(a)(ia) due to non-deduction of TDS. The FAA upheld the disallowance stating that the expenditure had not crystallized and was not allowable as a business expenditure. The ITAT, however, held in favor of the appellant based on a precedent where it was established that Sec.40(a)(ia) did not apply to year-end payments. The ITAT allowed this ground of appeal in favor of the appellant, resulting in a partial allowance of the appeal. In conclusion, the ITAT Mumbai partially allowed the appeal filed by the assessee, ruling in favor of the appellant on the disallowance of depreciation on intangible assets and the addition u/s.40(a)(ia) of the Act. The disallowance u/s.14A of the I.T. Act was partially upheld, with specific instructions for the AO to consider additional factors while calculating the disallowance.
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