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2018 (9) TMI 348 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - Held that - The facts of the case are identical to the facts of A. Y. 2008-09 wherein the Hon ble Delhi High Court in case of H. T. Media Ltd. Vs. Principal CIT (2017 (8) TMI 962 - DELHI HIGH COURT) held that in the facts of the case no disallowance on account of interest is called for and disallowance made by the company of ₹ 3 lac on account of administrative expenses is to be upheld, since the Assessing Officer had not recorded any satisfaction. Disallowance on account of computer peripherals - Held that - This issue is covered in favour of the assessee by the order of the Tribunal in assessee s own case for A. Y. 2007-08 wherein the ratio laid down by the Hon ble High Court in case of BSES Yamuna Power Ltd. 2010 (8) TMI 58 - DELHI HIGH COURT wherein the entitlement to the higher rate of depreciation on computer peripherals has been laid down by deciding the issue in favour of the assessee. Allowability of club expenses - Held that - This issue is covered in favour of the assessee by the Tribunal for A. Y. 2007-08 in assessee s own case wherein the ratio of the Hon ble Apex Court in case of United Glass Manufacturing Co. Ltd. (2012 (9) TMI 914 - SUPREME COURT) has been followed.
Issues Involved:
1. Disallowance under Section 14A read with Rule 8D. 2. Disallowance of depreciation on computer peripherals. 3. Disallowance of additional depreciation on computer software. 4. Disallowance of club expenses. 5. Disallowance of training expenses. 6. Disallowance of royalty and copyright charges. Detailed Analysis: Issue 1: Disallowance under Section 14A read with Rule 8D - Assessment Year 2009-10: The CIT(A) deleted the disallowance of ?9,91,48,048/- made by the AO under Section 14A read with Rule 8D. The Tribunal upheld this deletion, noting that the facts were identical to those in AY 2008-09, where the Delhi High Court ruled in favor of the assessee, stating no disallowance on account of interest was called for and only ?3 lac on account of administrative expenses was upheld. - Assessment Year 2010-11: The CIT(A) upheld disallowance of ?82,23,500/- out of the total ?9,47,71,607/- made by the AO. The Tribunal remanded the issue back to the AO to verify the average investment and expenditure incurred on non-exempt investments, noting the AO failed to consider the assessee's revised disallowance of ?5,45,000/-. - Assessment Year 2011-12: The Tribunal found the issues identical to AY 2010-11 and remanded the matter back to the AO for fresh adjudication, following the same directions as for AY 2010-11. Issue 2: Disallowance of depreciation on computer peripherals - Assessment Year 2009-10: The CIT(A) deleted the disallowance of ?71,89,908/- on computer peripherals. The Tribunal upheld this deletion, referencing the assessee's own case for AYs 2007-08 and 2008-09 where similar grounds were dismissed following the Delhi High Court's judgment in CIT vs. BSES Yamuna Power Ltd. Issue 3: Disallowance of additional depreciation on computer software - Assessment Year 2009-10: The CIT(A) deleted the disallowance of ?34,54,795/- on additional depreciation for computer software. The Tribunal upheld this decision, noting the issue was covered in favor of the assessee by the Tribunal's order for AY 2008-09, which considered computer software as part of machinery for additional depreciation purposes. Issue 4: Disallowance of club expenses - Assessment Year 2009-10: The CIT(A) deleted the disallowance of ?11,25,761/- on club expenses. The Tribunal upheld this deletion, referencing the assessee's own case for AYs 2007-08 and 2008-09 where similar grounds were decided in favor of the assessee following the Supreme Court's decision in CIT vs. United Glass Manufacturing Co. Ltd. - Assessment Year 2010-11: The CIT(A) deleted the disallowance of ?17,72,651/- on club expenses. The Tribunal upheld this deletion, again referencing the assessee's own case for AYs 2007-08 and 2008-09. - Assessment Year 2011-12: The Tribunal found the issues identical to AY 2010-11 and upheld the deletion of club expenses disallowance. Issue 5: Disallowance of training expenses - Assessment Year 2010-11: The CIT(A) deleted the disallowance of ?1,08,50,266/- on training expenses. The Tribunal upheld this deletion, citing the assessee's own case for AYs 2007-08 and 2008-09 where similar grounds were dismissed following the Delhi High Court's decision in CIT v. Solus Pharmaceuticals Ltd. Issue 6: Disallowance of royalty and copyright charges - Assessment Year 2010-11: The AO disallowed ?2,68,45,425/- on royalty and copyright charges. The CIT(A) deleted this disallowance. The Tribunal did not provide a specific ruling on this issue, focusing instead on the other grounds of appeal. Conclusion: - Assessment Year 2009-10: The Tribunal dismissed the Revenue's appeal. - Assessment Year 2010-11: The Tribunal partly allowed both the Revenue's and the assessee's appeals for statistical purposes, remanding the issue of disallowance under Section 14A read with Rule 8D back to the AO for fresh adjudication. - Assessment Year 2011-12: The Tribunal partly allowed both the Revenue's and the assessee's appeals for statistical purposes, remanding the issue of disallowance under Section 14A read with Rule 8D back to the AO for fresh adjudication.
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