9911796707
TMI Blog2011 (7) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... on on factory building amounting to ₹ 12,57,291/-. 3. The facts relating to controversy involved in this ground are that the AO disallowed ₹ 12,57,291/- out of depreciation on factory building. On appeal, in the impugned order, the ld. CIT(A), following his order dated 18.12.2007, for the assessment year 2005-06 and also for earlier assessment years i.e. assessment year 2002-03 and 2003-04, allowed the relief to the assessee on this issue for the assessment year under appeal. Aggrieved, the Revenue is in appeal. 4. At the outset, Shri P.M.Mehta, appearing on behalf of the Assessee, produced the copy of the decision dated 09.07.2010 of the ITAT, B Bench in assessee s own case for the assessment year 2005-06, whereby t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given to the subsidiary companies. Therefore, the objection of the ld. D.R. that, provisions of section 38(2) were not considered, is not maintainable. In view of the foregoing, we, following the decision of the Tribunal, in assessee s own case for the assessment year 2005-06, incline to uphold the order of the ld. CIT(A). This ground of Revenue s appeal is rejected. 7. Ground no.2 of Revenue s appeal is that the ld. CIT(A) erred in reducing the percentage of disallowance of administrative expenses from 5% to 3%. The only ground raised in the Cross-Objection is against sustaining the disallowance of 3% (out of 5% of administrative expenses aggregating to ₹ 47,68,596/-) because other grounds of Cross- Objection were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly incurred for earning tax-free income and not assumed expenditure or deemed expenditure. (ii) In CIT-vs- Hero Cycles Ltd. reported in 323 ITR 518, wherein the Hon ble Punjab Haryana High Court ahs held that the disallowance u/s.14A requires a finding of expenditure having been incurred for earning tax exempt income for making any disallowance u/s.14A. (iii) In Dresdner Bank AG-vs- Addl. CIT reported in 108 ITD 375 (Mum.), wherein it is held that wherever expense incurred has no relationship with income not includible in total income, there cannot be any occasion to invoke disallowance under section 14A; therefore, it is for Assessing Officer to identify expenditure which can be reasonably said to have been incurred to earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Therefore, the order of the ld. CIT(A) deleting the disallowance of ₹ 2,38,430/- be set made and that of the AO be restored. 12. Having heard both the sides, we have carefully gone through the orders of the authorities below. In the assessment order, the AO disallowed ₹ 2,38,430/-, being 5% of total expenditure of ₹ 47,68,596/-. In the impugned order, the ld. CIT(A) restricted this disallowance to 3%. Recently, the Hon ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. vs- DCIT reported in [2010] 310 ITR 81 (Bom.) held that Rule 8D is not applicable to the assessment year 2006-07. Apart from this, there are various decisions, which have held that if department does not find any nexus between exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
