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TMI Blog2016 (6) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... re incurred has resulted in the expansion of capital. What matters is the nature of expenditure incurred and not the benefit that is derived out of the expenditure. Considering the nature of expenses, it is apparent that the expenditure is incurred for the purpose of expansion of capital and therefore cannot be treated as revenue expenditure. Hence, we do not find it necessary to interfere with the orders of the Revenue. Consequently, this issue is decided against the assessee. Disallowance U/s.14A r.w.r 8D - Held that:- Assessing Officer had invoked the provisions of section14A r.w.r 8D because the assessee had invested in shares, the dividend income of which, is exempt from tax and thereby computed the disallowance by adopting 0.5% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Assessing Officer who had disallowed 0.5% of the average investments towards expenditure attributable for earning exempt divided income by invoking section 14A r.w.r 8D. ITA No.11/Mds/2016 (Assessment Year : 2004-05): i) The learned Commissioner of Income Tax (Appeals) has erred in confirming the order of the learned Assessing Officer who had held that interest earned on ICD, FD with banks, discounting charges and IT refund will be taxable under the head income from other source and therefore such income will not be eligible for deduction under section 36(1)(viii) of the Act. ITA No.12/Mds/2016 (Assessment Year : 2006-07): i) The learned Commissioner of Income Tax (Appeals) has erred in confirming the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2016 : (Assessment Year: 2002-03): Ground No.1: Disallowance of professional and consultancy fees paid for Rs. 6,83,000/- to PWC towards equity expansion 4. During the course of assessment proceedings, it was observed by the learned Assessing Officer that the assessee has paid ₹ 6,83,000/- to M/s. PWC in connection with equity expansion activity of the assessee. The learned Assessing Officer relying in the decision of the Hon ble Apex Court in the case of CIT Vs. Book Bond India Ltd. reported in 225 ITR 798 disallowed the payment made by the assessee for ₹ 6,83,000/- because the assessee has incurred these expenses towards expansion of the capital base of the company and therefore not in the nature of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials available on record. The nature of service rendered by M/s. PWC to the assessee company such as preparation of information memorandum, identification of potential investors, assistance in value analysis, assistance in structuring the consideration and the transaction, assistance in negotiations and coordinating the completion of the transaction would eventually be attributable for capital expansion and the assessee has incurred the expenses towards the same. Therefore, the ratio laid down by the Hon ble Apex Court cited by the learned Assessing Officer and relied upon by the learned Commissioner of Income Tax (Appeals) would be applicable in the case of the assessee. It does not matter whether the expenditure incurred has resulte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Discounting charges Rs.31,71,471 iv) IT Refund Rs.25,355 Total Rs.38,89,413 6.1 The assessee had also claimed deduction under section 36(1)(viii) of the Act on the income earned by its business of providing long term housing finance. The learned Assessing Officer was of the opinion that the above interest income of ₹ 38,89,413/- has to be excluded from the business income of the assessee for computing the deduction available under section 36(1)(viii) of the Act because the same was not derived from the business of long term housing finance and the deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously analyzed the issue and by relying in the various decisions of the Hon ble Apex Court held the matter against the assessee, we do not find it necessary to interfere with the orders of the learned Commissioner of Income Tax (Appeals) on this issue. Thus, this matter is also decided against the assessee. ITA No.12/Mds/2016 (Assessment Year : 2006-07): Ground No.1 : Disallowance of depreciation: 7. The learned Assessing Officer observed that the assessee had claimed depreciation on the building which was let out. It was also observed that the assessee had received aggregate rent of ₹ 5,60,481/- during the relevant assessment year from the above said property and the same was offered to tax under the head income f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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