2012 (8) TMI 1157 - AT - Income Tax

Summary

Issues Involved:
1. Disallowance u/s 14A.
2. Depreciation on UPS, printers, scanners.
3. Depreciation on elevator.

Summary:

Disallowance u/s 14A:

For AY 2007-08, the AO disallowed Rs. 27,19,110/- u/s 14A read with Rule 8D, which was reduced to Rs. 69,894/- by the CIT(A). The Tribunal restored the matter to the AO for re-adjudication in light of the Hon'ble jurisdictional High Court decision in M/s Max Opp. Investment Ltd. Vs. ACIT, 203 Taxman 364(Del.). For AY 2008-09, the AO disallowed Rs. 1,39,83,342/- under Rule 8D, which was reduced to Rs. 44,24,562/- by the CIT(A). The Tribunal upheld the deletion of Rs. 99,58,780/- related to interest but restored the administrative expense disallowance of Rs. 44,24,562/- to the AO for re-examination.

Depreciation on UPS, printers, scanners:

For AY 2007-08, the AO restricted depreciation on UPS, printers, and scanners to 15% as against the assessee's claim of 60%, resulting in a disallowance of Rs. 3,23,127/-. The CIT(A) allowed the claim, following the jurisdictional ITAT and Delhi High Court decisions. The Tribunal upheld the CIT(A)'s order, allowing depreciation at 60%.

Depreciation on Elevator:

For AY 2008-09, the AO restricted depreciation on the elevator to the rates prescribed for buildings, disallowing Rs. 1,31,400/-. The CIT(A) upheld this view, considering the elevator as part of the building. The Tribunal set aside the CIT(A)'s order and restored the matter to the AO for re-examination in light of judicial pronouncements and previous assessments.

Conclusion:

The appeal of the Revenue for AY 2008-09 is dismissed, while their appeal for AY 2007-08 is partly allowed. The appeal of the assessee for AY 2008-09 is allowed for statistical purposes.

Order pronounced in open Court.