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TMI Blog2015 (2) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A)directing AO to allow the depreciation after working out the WDV of the assets for earlier years - Held that:- Depreciation has to be allowed on written down value (WDV) after reducing the actual depreciation allowed in the earlier years. In view of the earlier years order of this Tribunal in assessment year 2007-08 as well as in assessment year 2008-09, we do not find any substance in the appeal of the revenue. - Decided against revenue. - ITA No. 5408, 4957/Mum/2012 - - - Dated:- 15-1-2014 - Sanjay Arora And Vijay Pal Rao, JJ. For the Appellant : Shri Sanjiv Jain For the Respondent : Shri Dalpat Shah ORDER:- PER : Vijay Pal Rao These cross appeals are directed against the order dated 9.5.2012 of CIT(A) for the assessment year 2009-10. The assessee in this appeal has raised following grounds;- 1. Additional disallowance u/s 14A. r.w. Rule 8D by ₹ 7,79,654/- 1.1 The Ld. CIT (Appeals) - 9, Mumbai, erred in confirming an additional disallowance of ₹ 7,79,654/- u/s 14A r.w. Rule 8D, ignoring the fact that the appellant has voluntarily disallowed a sum of ₹ 1,03,915/- as worked out U/R 8D at % of the average value of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the AO. 2.2 Before us at the very outset the Ld. AR of the assessee pointed out that though the issue of disallowance u/s 14A has been decided by this Tribunal against the assessee for the assessment year 2008-09 vide order dated 21.12.2012 in ITA no. 7599/mum/2011. However the Ld. AR of the assessee has submitted that the crucial fact that the assessee has not incurred any expenditure in respect of the investment in question and for earning tax free income has not been considered in the earlier years. He further submitted that the assessee did not raise this issue in the earlier years and the decision of the Tribunal is only on the point whether the disallowance u/s14A can be made when there is no dividend income. Thus the learned AR has submitted that in the assessment year under consideration the assessee has not incurred any expenditure in respect of the investment and dividend income in question. He has referred to the details at page 20 of the paper book and submitted that no fresh investment was made in the year under consideration and all the investment were made in the earlier years that too long back. The Ld. AR has further pointed out that these investments are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee would have incurred any administrative expenses in holding these investments. The AO has not brought on record any material to show that the assessee has incurred any expenditure in relation to the income which does not form part of the total income. Section 14A has within it implicit the notion of apportionment in the cases where the expenditure is incurred for composite/indivisible activities in which taxable and non taxable income is received but when no expenditure has been incurred in relation to the exempt income then principle of apportionment embedded in section 14A has no application. The object of section 14A is not allowing to reduce tax payable on the non exempt income by deducting the expenditure incurred to earn the exempt income. In the case in hand it is not the case of the revenue that the assessee has incurred any direct expenditure or any interest expenditure for earning the exempt income or keeping the investment in question. If there is expenditure directly or indirectly incurred in relation to exempt income the same cannot be claimed against the income which is taxable. For attracting the provisions of section 14A- there should be proximate cause for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made while computing the book profit in respect of the disallowance of ₹ 8,83,569/- made u/s 14A. 4. Now we take up the revenue s appeal in ITA no. 4957/Mum/2012 the only ground raised by the revenue in its appeal is as under:- Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the assessing officer to allow the depreciation at ₹ 35,22,140/- after working out the WDV of the assets for earlier years as decided by the appellate authorities without appreciating the facts that before any allowance of deduction under chapter VIA of the I.T. Act, 1961, the depreciation has to be allowed from the gross total income . 4.1 We have heard both the Ld. AR and Ld. DR and have considered the relevant material on record. At the outset we note that this issue is covered against the revenue by the decision of this Tribunal in assessee s own case in assessment year 2007-08 as well as in assessment year 2008-09. For the assessment year 2008-09 the Tribunal has considered and decided this issue in para 21 and 22 which is reproduced as under;- 21. We have heard the argument from either side, From the facts. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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