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TMI Blog2014 (11) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the assessee company periodically monitors through its Board of Directors about the investments. In such circumstances, it cannot be said that assessee has not at all incurred any expenses in managing its portfolios. Following the decision of REI Agro Ltd. Vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA], we direct the Assessing Officer to recompute the disallowance under Rule 8D(2)(iii) by taking the amount equal to ½ percentage of the average value of the investment which has given rise to the income which does not form part of total income. - ITA No. 1236 & 1240/Mds/2014 & 1259 to 1261/Mds/2014 - - - Dated:- 28-11-2014 - SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate Bench considered a similar issue and held that UPS is eligible for deprecation at 60% observing as under:- 7. The last ground of appeal of the assessee relates to depreciation on UPS. The AR for the assessee submitted that UPS is a part of the computer and energy saving device and therefore, depreciation should be allowed @ 80%. On the other hand, the DR submitted that the UPS is neither power saving device nor part of a computer and the CIT(A) has rightly followed the decision of the Tribunal in the case of Nestle India Ltd. Vs. DCIT., reported as 111 TTJ 498. 8. We find that this issue has already been adjudicated by us in ITA No.818/Mds/2010 relevant to the assessment year 2007-08. The relevant extract of the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is partly allowed. 5. Respectfully following the said decision of this Tribunal, we uphold the order of the Commissioner of Income Tax (Appeals) in allowing depreciation on UPS at 60% as against 15% allowed by the Assessing Officer. The grounds of appeal raised by the Revenue are rejected. ITA Nos.1259 to 1261/Mds/2014: (A.Y.2008-09 to 2010-11): 6. These three appeals are filed by the assessee for the assessment years 2008-09 to 2010-11. The only issue in all these three appeals is that Commissioner of Income Tax (Appeals) erred in confirming the disallowance of expenditure under section 14A read with Rule 8D(2)(iii) of the Act. 7. In all these three assessment years, the Assessing Officer disallowed 0.5% of average ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking investments of surplus funds in mutual funds. The counsel submits that assessee has appointed Wealth Advisors (India) Pvt. Ltd., who are wealth advisor of the assessee company and they managed the portfolio of the investments of the assessee. Counsel submits that assessee company is not incurring any expenses / any payment in respect of their services upto the financial year 2012-13. Counsel submits that remuneration or any fee for services rendered by Wealth Advisors were all paid by mutual fund companies in which investments were placed by the assessee. Counsel submits that there were no expenses incurred by the assessee company to manage investments in equity/ mutual funds. Therefore Rule 8D(2)(iii) has no application in its case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 8. In respect of provisions of Rule 8D(2)(iii) which is the subject matter of the assessee s appeal in the assessee s hand, a perusal of the said provision shows that what is disallowable under Rule 8D(2)(iii) is the amount equal to percentage of the average value of the investment the income from which does not or shall not form part of the total income. Thus, under sub-clause (iii) what is disallowed is percentage of the numerator B in Rule 8D(2)(ii). Again this is to be calculated in the same line as mentioned earlier in respect of Numerator B in Rule 8D(2)(ii) of the Act. 8.1 Thus, not all investments become the subject matter of consideration when computing disallowance under section 14A read with rule 8D. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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