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TMI Blog2012 (8) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances of the case, the learned CIT(A) has erred, both on the facts and in law, in confirming the action of the AO to the extent of disallowing ₹ 40,00,000/- u/s 14A of the income tax Act holding it as expenses in relation to earning to income which does not form part of the total income. 3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO in disallowing depreciation of ₹ 27,12,770/- on account of civil construction towards ETP/STP plant considering of not as an integral part. The learned CIT(A) did not provide an opportunity to prove that the civil construction in ETP/STP was an integral part of the plant. 4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO in disallowing depreciation of ₹ 51,74,135/- on account of electric installation considering it not an integral part of Plant Machinery. 5. That the appellant craves leave to add, amend or alter any of the grounds of appeal. 4. Ground Nos.1 5 are general in nature and does not require any adjudication, hence d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where no income has accrued or arisen to the assessee, there cannot be any tax. In these cases, the issue regarding expenses incurred for earning of exempt income was not dealt with. Although the Hon'ble High Court of Bombay in the case of Godrej and Boyce have held that Rule 8D is not applicable with retrospective effect i.e. prior to assessment year 2008-09, they have observed that the assessing officer has to enforce the provisions of section 14A(1). For that purpose the assessing officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income. It is seen from the Balance-Sheet of the appellant that during the year it has made long term investments of about ₹ 12 crores. The decision regarding where and when to invest must have taken the time and effort of the management. Moreover, part of other expenses like printing and stationery, conveyance and travelling, postage, telephone etc. can be said to be attributable to the making of these investments. I, therefore, estimate the expenditure incurred by the appellant company during the year for entering into the joint ventures at ₹ 40 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation purposes, the appellant has to claim depreciation as per the Income-tax Act and Rules and as per Appendix 1 to the Income-tax Rules, 1962, depreciation on solid waste control equipments and. solid waste recycling and resource, recovery systems is to be allowed at 100% of the WDV while other plant and machinery qualifies for depreciation at 15%. The appellant has relied upon the cases of CIT vs. Tajmahal Hotel (1971) 82 ITRR 44 (SC); Addl. CIT vs. Madras Cement Ltd. 110 ITR 281 (Mad) and R.C. Chemicals Industries vs. CIT (1982) 134 ITR 330 (Del). The broad findings in all these cases is that whether a fixed asset is to be considered as 'plant and machinery' and allowed depreciation accordingly would have to be decided in the context of the business being carried on by the assessee. It would have to be seen whether the asset constitutes an integral part of the plant. The appellant has not been able to prove that the civil structures on which it has claimed depreciation at 100% were an integral part of the ETP/STP i.e. they constituted the means for carrying out the effluent / sewage treatment process. Accordingly, I uphold the action of the assessing officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. For example, in the case of CIT vs. Mahanagar Telephone Ltd., it was held by the Hon'ble Court that since the business of the assessee was to provide communication network in cities, underground cables used by it constituted 'plant machinery of the assessee. Similarly, in the case of Siemens India Ltd. vs. CIT, a company engaged in manufacture of equipment for generation and transmission of electricity and other electrical goods, work done in setting up of electroplating shop was held to be part of plant and machinery of the appellant. It may be noted that these companies were engaged in the business of providing communication network and manufacturing of equipment for generation and transmission of electricity and it was in the context of the business that they are carrying out, that cables, etc. were held to be part of their plant. The appellant, however, was carrying on the business of manufacture and sale of sheet metal components for automobiles and white goods sector and the assessing officer rightly allowed the depreciation on electrical items @ 10%, holding them to be part of electrical fittings as, these items did not constitute an integral part of plant an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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