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2014 (4) TMI 429 - AT - Income TaxCondonation of delay Delay of 135 days Held that - Assessee by the affidavit contended that the first appellate order was served on the erstwhile consultant and there was a change in the assessee company s tax consultant - The assessee, being a dormant company had no turnover in the last 4 years - the company does not have any staff or full time professionals to look into the tax matter thus, the assessee has been prevented by sufficient cause for not filing the appeal Delay condoned. Disallowance u/s 14A of the Act r.w. Rule 8D of the Rules Held that - The decision in Godrej & Boyce Ltd. Mfg. Co. VS. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT followed - the disallowance has to be worked out by the AO on some reasonable basis and not rule 8D in so far as the assessment years prior to 2008-09 are concerned as the authorities below have computed the disallowable amount as per rule 8D, such computation cannot be upheld thus, the order is set aside and the matter is remitted back to the AO for fresh consideration Decided in favour of Assessee. Denial of benefit of set off - Unabsorbed depreciation against capital gains Held that - The decision in M/s Suresh Industries Pvt Ltd Vs ACIT 2012 (11) TMI 674 - ITAT MUMBAI followed - unabsorbed depreciation can be set off against any income and the brought forward of unabsorbed depreciation is treated as current year s depreciation because of the legal fiction, therefore the treatment given to the current year s depreciation is equally applicable to brought forward depreciation after application of Finance Act, 2001 thus, the AO is directed to allow the set off of unabsorbed depreciation Decided in favour of Assesse.
Issues involved:
1. Condonation of delay in filing appeal. 2. Disallowance under section 14A of the Income-tax Act. 3. Set off of unabsorbed depreciation against income under the head 'capital gains'. 4. Allowance of benefit under section 80-G for donation. Issue 1: Condonation of delay in filing appeal The appeal was filed 135 days late, and the assessee provided reasons for the delay, citing a change in tax consultant, being a dormant company with no staff, and turnover in the last 4 years. The Tribunal accepted the reasons as sufficient cause for the delay and proceeded to decide the appeal. Issue 2: Disallowance under section 14A of the Income-tax Act The AO disallowed a portion of interest related to investments under section 14A, which was partly confirmed by the Ld.CIT(A). The Tribunal noted that for the Assessment Year 2007-08, Rule 8D could not be applied, and the disallowance should be worked out on a reasonable basis. The matter was remanded to the AO for deciding the quantum of disallowance based on a 'reasonable basis' as per the judgment of the Hon'ble Bombay High Court. Issue 3: Set off of unabsorbed depreciation against income under the head 'capital gains' The assessee claimed set off of unabsorbed depreciation against income from short term capital gains. The AO denied the set off, but the Tribunal referred to previous decisions allowing such set off. Relying on precedents, the Tribunal directed the AO to allow the set off of unabsorbed depreciation as claimed by the assessee. Issue 4: Allowance of benefit under section 80-G for donation The AO was directed to allow the benefit of section 80-G for a donation made after verification of relevant facts and in accordance with the law, if the taxable income became positive after adjustments. In conclusion, the appeal filed by the Assessee was allowed for statistical purposes, with specific directions given for each issue raised in the appeal.
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