9911796707
TMI Blog2013 (11) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has erred in law and on facts in deleting addition of ₹ 37141/- on account of disallowance of extra depreciation on computer peripherals/ accessories ignoring that as per the IT Rules 60% depreciation is allowable only on computer and computer software and not on computer peripherals and accessories. 3. The Ld. CIT(A) has erred on facts and in law in deleting addition of ₹ 405205/- made on account of disallowance of interest attributable to interest free loan granted to sister concerns ignoring that the assessee is paying interest @ 10.74% on the loans from the bank and forwarding loans to sister concerns without charging any interest. 3. Apropos deletion of addition of ₹ 7,14,928/- made on account of disallowance of expenses attributable to exempted income u/s 14A of the IT Act read with Rule 8D. 3(a). Briefly stated facts of the case are that the assessee company was carrying on business in media and media services either through itself or through subsidiaries, joint venture and associates. The media business included publications such as Dataquest, Voice Data, DQ Channels, DQ Weeks, PC Quest, Living Digital, conduct of business conventions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008-09 and that it cannot have retrospective effect, so that the decision of the Tribunal in ITO Vs. Daga Capital Management (P) Ltd. (2009) 3 ITR (AT) 1 Mumbai (SB) stands impliedly disapproved. Therefore the Assessing Officer, erred in applying the law as decided by Special Bench of ITAT (Mumbai), when the Mumbai High Court has held that Rule 8 will be prospective in its operation and will be applicable only for Assessment Year 2008-09. We find no infirmity in the decision of the Ld CIT(A) who have relied on the decision of the Bombay High Court. We have taken notice of the fact that after the ld CIT(A) has passed this impugned order on 01st March, 2011. The Hon ble Delhi High Court dealt with the same issue and vide judgment dated 18th November, 2011, in the case of Maxopp Investment Ltd. Vs. CIT 2012 347 ITR 272 (Delhi) wherein it has reiterated that Rule 8D is not retrospective and would be workable only with effect from the date of introduction of Rule 8D i.e. on March 24, 2008. The Hon ble Delhi High court in the said judgment has taken into consideration the Hon ble Bombay High Court s decision in Godrej (supra). Therefore, we find no infirmity in the impugned order of ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o determine the amount of such expenditure on the basis of a reasonable and acceptable method of apportionment. It would be appropriate to recall the words of the Supreme Court in Walfort [2010] 326 ITR1 (SC) to the following effect (page17): The theory of apportionment of expenditure between taxable and non-taxable has, in principle, been now widened under section 14A. So, even for the pre-rule 8D period, whenever the issue of section 14A arises before an Assessing Officer, he has, first of all, to ascertain the correctness of the claim of the assessee in respect of the expenditure incurred in relation to income which does not form part of the total income under the said Act. Even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income, the Assessing Officer will have to verify the correctness of such claim. In case, the Assessing Officer is satisfied with the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, the Assessing Officer is to accept the claim of the assessee in so far as the quantum of disallowance under section 14A is concerned. In such eventua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Majumdar (2006) 98 ITD 119 (Kol) ii) Expeditors International (India) (P) Ltd. (2008) 118 TTJ 652 (Del) iii) Container Corporation of India Vs. ACIT (2009) 30 SOT 284 (Del) 4(c). We have heard both the parties on this issue and we find that Ld. CIT(A) has rightly allowed the depreciation claimed by the assessee @ 60% as the same is in accordance with the aforementioned decisions of the Tribunal. For the sake of convenience the observations of the co-ordinate Bench of the Tribunal in the case of Container Corporations of India Vs. ACIT (supra) are reproduced below:- 40. The accessories and peripherals of computers provide input processing, storage and various output devices. The output devices such as printer, scanner, etc. are computer peripherals and form essential parts of PC. These output devices cannot work in isolation and also working on computer system without an output device such as printer would be futile. In view of the above, the claim of depreciation at 60% on printer, scanner and other computer peripherals is completely justified. The claim of depreciation of 60 % further gets justified in view of the fact that even computer software which is ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of own funds and not interest bearing funds. The assessee's financial position with respect to own funds as per audited accounts is as under. ocParticulars As on 31.03.07 (Rs.) As on 31.03.06 (Rs.) Share Capital 10,00,12,420 10,00,12,420 Reserves Surplus 27,24,04,258 24,37,12,203 Sub-total 37,24,16,678 37,24,16,678 Less: Miscellaneous Expenditure 4,15,60,174 4,15,60,174 Total own funds 33,08,56,504 29,11,27,762 Profit after Tax 4,29,79,585 5,06,68,520 Interest free Loans to CMFL CMDCL 80,08,000 17,00,000 Own funds - average 31,09,92,133 Loan to CMFL - average product 26,16,986 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
