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TMI Blog2018 (5) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the AO only on the last day of the assessment. This being so, in the interest of natural justice, this issue is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case Expenditure incurred in respect of the expansion of the assessee’s business - Held that:- AO is directed to allow the expenditure as Revenue expenditure. See COMMISSIONER OF INCOME-TAX Versus RANE (MADRAS) LTD. [2007 (6) TMI 25 - HIGH COURT, MADRAS ] Carry forward of the unabsorbed depreciation - as per AO 08 years limitation in respect of the carry forward of the depreciation had expired - Held that:- As it is noticed that the issue under appeal is squarely covered by the principles laid down by the Hon’ble Gujarat High Court in the case of Gujarat Themis Biosyn Ltd.[2014 (5) TMI 194 - GUJARAT HIGH COURT] as also the decision of the General Motors [2012 (8) TMI 714 - GUJARAT HIGH COURT], and as it is noticed that the Ld.CIT(A) has followed the principles laid down by the Hon’ble Gujarat High Court in the above decisions in respect of the carry forward of the unabsorbed depreciation by treating the same as depreciation for the current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the same assessee and have common issues they are disposed off by this common order. 10. The Ld.AR submitted a chart explaining the issues in the above appeals filed by the assessee and the Revenue. 11. It was submitted by the Ld.DR that all the appeals consists of basically four issues. Consequently, the appeals are disposed off by disposing all the issues specifically and consequently, relating the same to the relevant appeals. 12. It was a submission that the first issue was in regard to the disallowance u/s.14A. It was a submission that the AO had invoked the provisions of Sec.14A and by applying the Rule 8D disallowed, the expenditure in relation to the exempt income, being the dividend income, received by the assessee. At the time of hearing, it was fairly agreed by both the sides that the issue was settled by the decision of the Hon ble Delhi High Court in the case of M/s.Joint Investments Pvt. Ltd., reported in 372 ITR 694, wherein it has been held that the disallowance u/s.14A of the Act cannot exceed the tax exempt income. It was further submitted by the Ld.AR that the AO had also considered the disallowance u/s.14A when computing the book profits u/s.115J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have considered the rival submissions. 19. A perusal of the Assessment Order shows that the Ld.CIT(A) has arrived at a conclusion that the expenditure is allowable expenditure and that the details were produced before the AO. However, a perusal of the Assessment Order as also the details show that the details in respect of the expenditure incurred for hiring of the Chartered flight was produced before the AO only on the last day of the assessment. This being so, in the interest of natural justice, this issue is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case. 20. The next issue is in regard to the expenditure incurred in respect of the expansion of the assessee s business. It was a submission that the assessee had incurred certain expenditure during the AY 2008-09 on the expansion by setting up of a new unit at Sriperumpudur. The AO had treated the said expenditure as a capital expenditure. It was a submission that the assessee was already engaged in the manufacture of oil seals and the Sriperumbudur unit was set up for expanding the existing products by setting up of an additional unit for manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Ld.CIT(A). 27. We have considered the rival submissions. 28. As it is noticed that the issue under appeal is squarely covered by the principles laid down by the Hon ble Gujarat High Court in the case of Gujarat Themis Biosyn Ltd., referred to supra, as also the decision of the General Motors, referred to supra, and as it is noticed that the Ld.CIT(A) has followed the principles laid down by the Hon ble Gujarat High Court in the above decisions in respect of the carry forward of the unabsorbed depreciation by treating the same as depreciation for the current year, we find no reason to interfere in the findings of the Ld.CIT(A) on this issue. Consequently, the order of the Ld.CIT(A) on this issue stands confirmed. 29. ITA No.1076/Chny/2016 Revenue s appeal: Ground Nos.1 5 are general in nature. Ground Nos.2.1 to 2.4 are partly allowed. Ground Nos.3.1 to 3.3 Ground Nos.4.1 4.2 are dismissed. In the result, the Revenue s appeal in ITA No.1076/Chny/2016 is partly allowed. 30. ITA No.1059/Chny/2016 Assessee s appeal: Ground Nos.1 4 are general in nature. Ground Nos.2 to 2.10 are partly allowed. Ground No.3 is allowed. In the result, the assessee s a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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