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TMI Blog2017 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 (8) TMI 58 - DELHI HIGH COURT ] Addition on account of Sec. 14A read with Rule 8D - Held that:- Issue of section 14A read with Rule 8D for year under consideration is also set aside to Ld. AO with a similar direction to re-compute disallowance of expenditure under section 14A read with Rule 8D as per ratio laid down by Hon’ble Delhi High Court in the case of Cheminvest Ltd., vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT]. - ITA No. 3805/Del/2011, ITA No. 1641/Del/2013 And ITA No. 1779/Del/2013 - - - Dated:- 13-4-2017 - SH. S. V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER For The Assessee : Sh. R. Santhanam, Adv. For The Department : Sh. Umesh Chand Dubey, Sr. DR ORDER PER BEENA A. PILLAI, JM: 1. The present appeals are filed by assessee as well as revenue against order dated 09.05.2011 and 28.01.2013 passed by Ld. CIT(A) for assessment year 2008-09 and 2009- 10. We shall first take up assessment year 2008-09 grounds raised by assessee in this appeal are as under: ITA number 3805/del/2011 ( 1) The Ld.CIT(A) erred in upholding the addition of ₹ 9,95661/- by disallowing amortization charge of Lease Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 115 JB of the Act. The returns were processed under section 143(1) and notices under section 143(2) was issued on 07.08.2009. In response to notices issued representative of assessee attended assessment proceedings and furnished details in support of returns filed by assessee as well as in response to queries that were raised during the course of assessment. 3. Ld. AO observed that assessee is engaged in business of manufacturing of tools, dies and sheet metal components, assemblies and subassemblies. Ld. AO during assessment proceedings observed that assessee has made investments, in respect of which income earned does not form part of taxable income. Ld. AO therefore, show caused assessee, as to why disallowance under section 14A read with Rule 8D of the Act should not be made. In response to show cause, assessee filed written submissions dated 25.11.2010 on the basis which of assessing officer was satisfied that interest expenses amounting to be 5, 43, 76, 924/-being the indirect expenses were attributable for earning of such exempt income. Accordingly, he computed disallowance under section 14A read with Rule 8D of the Act amounting to ₹ 9, 14, 838/-. 4. Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it has been pointed out that in terms of agreement with MIDC amount has been adjusted towards premium payable by licensee. 10. Similarly agreement entered into with JBH Tools Ltd., assessee has paid an amount of ₹ 33.29 lacs as premium and in the agreement entered into with Greater Noida Industrial Development Authority assessee has paid a premium of ₹ 1.20 crores. 11. He thus, submitted that Ld. CIT(A) has rightly disallowed amortization expenses claimed by assessee in its return of income. 12. We have perused submissions advanced by both sides in the light of records placed before us. 13. Ld. Counsel has tried to impress upon this bench that payments made to lessor are in nature of advance rents. However, there is no material on record to show that assessee has made these payments as advance rent for future years to secure any reduction in rent payable for future years or for any other business consideration. We are, therefore, unable to appreciate arguments advanced by Ld. Counsel that these advances paid are towards advance rent. Even from the terms of agreements, it is not clear as to whether advances paid has been adjusted against future rent or whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure in question is of revenue nature incurred wholly and exclusively for the purpose of business and cannot be treated as capital expenditure nor as resulting in any enduring benefit to the appellant and the impugned addition contrary to the binding decisions of Courts cited before him cannot be sustained and is liable to be deleted. 3. The lower authorities had erred in passing the impugned orders to the extent of additions and disallowances made/sustained and to that extent the impugned orders are liable to be set aside and the claims of the appellant rightly made deserve to be allowed with consequential relief to the appellant, after hearing both sides. ITA No.1779/del/2013 1. Whether in the facts and circumstances of the case, the Ld. CIT(A) erred in deleting addition of ₹ 16532/- made by the AO on account of excess depreciation on computer peripherals? 2. Whether in the facts and circumstances of the case, the CIT(A) was justified in restricting the addition made by the A.O on account of the Sec. 14A r.wr. 8D from ₹ 45,53,081/- to ₹ 4,51,375/-. 3. The appellant craves leave to add, alter, amend or forgo any grounds(s) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Rule 8D for year under consideration is also set aside to Ld. AO with a similar direction to re-compute disallowance of expenditure under section 14A read with Rule 8D as per ratio laid down by Hon ble Delhi High Court in the case of Cheminvest Ltd., vs CIT reported in 378 ITR 33. Accordingly this ground raised by revenue stands allowed for statistical purposes In the result appeal filed by the revenue stands partly allowed. ITA No. 1641/del/2013 (Assessee s appeal) 26. The only issue raised by assessee in this appeal is in respect of partial disallowance confirmed by Ld. CIT(A) under section 14 A read with Rule 8D. 27. As we have set aside entire issue in the appeal filed by revenue to Ld. AO for re-computing disallowance as per ratio laid down by Hon ble Delhi High Court in the case of Cheminvest Ltd., vs CIT reported in 378 ITR 33, this ground raised by assessee is also set aside. In the result appeal filed by assessee stands allowed for statistical purposes. In the result appeal filed by assessee for assessment year 2008-09 and 2009-10 stands allowed for statistical purposes and appeal filed by revenue for assessment year 2009-10 stands partly allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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