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TMI Blog2018 (5) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... ground. Disallowance u/s 14A r.w. Rule 8D - Held that:- No disallowance is called for u/s 14A of the Act in the absence of exempt income. Accordingly, the order of the Ld. CIT(A) on this issue is set aside and this ground of appeal of the assessee is allowed. Credit for TDS - Held that:- A.O. allowed the TDS to the extent of income admitted in form No.26AS as per section 199 read with rule 37BA of the Act and disallowed the balance amount of TDS. The assessee filed appeal requesting to allow the entire credit for TDS. As per section 199 read with rule 37B of the Act, the credit for tax is allowed only on the income admitted relatable to the TDS. Therefore, in the absence of the receipt not being admitted for the assessment year under consideration, we do not find any error in the order of the CIT(A) and the same is upheld. Alternate ground with regard to TDS claim restricted by the A.O. A.O. allowed TDS of ₹ 12,12,924/- in the assessment year under consideration out of the TDS amount of ₹ 70,61,000/- made by the DGNP Visakhapatnam. The assessee has requested as an alternate ground to allow the credit for TDS of the balance amount in the subsequent year as and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r running on hire and the vehicles were included in the block of assets for the purpose of depreciation @ 30%, hence argued that once the assets are included in the block, the same cannot be altered and the depreciation required to be allowed continuously at higher rate, irrespective of it s usage. The Ld. A.R. further argued that after introduction of concept of block of assets, individual asset is no more in vogue and the assets are grouped into the block of assets and depreciation is allowed on such block. Therefore, argued that since the vehicles are included in 30% depreciation block, the assessee would be continuously entitled for the higher rate of depreciation irrespective of its usage in the subsequent years. The assessee also relied on the decisions of Hon ble Delhi High court in the case of CIT(A) Vs. Oswal Agro Mills (341 ITR 0647), and the CIT(A) Vs. Yamaha Motor India Limited 328 ITR 0297 and argued that since the assessee has used the vehicles for commercial purpose in the earlier years and the assets were grouped in the block of assets as per section 43(6)(c) of the Income Tax Act, 1961 (hereinafter called as 'the Act'), the asset cannot be shifted from high ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that case that it is not possible to exclude a particular asset from the block. For ready reference, we extract para Nos.29 to 32 which reads as under: 29. As per amended section 32, deduction is to be allowed - In the case of any block of assets, such percentage on the written down value thereof as may be prescribed . Thus, the depreciation is allowed on block of assets, and the revenue cannot segregate a particular asset therefrom on the ground that it was not put to use. 30. With the aforesaid amendment, the depreciation is now to be allowed on the written down value of the 'block of assets' at such percentage as may be prescribed. With this amendment, individual assets have lost their identity and concept of 'block of assets' has been introduced, which is relevant for calculating the depreciation. It would be of benefit to take note of the Circular issued by the revenue itself explaining the purpose behind the amended provision. The same is contained in CBDT Circular No. 469, dated 23-9-1986, wherein the rationale behind the aforesaid amendment is described as under : 6. 3 As mentioned by the Economic Administration Reforms Commission (Repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o strengthen the claim that now only detail for block of assets has to be maintained and not separately for each asset. 7.1 The above case law relied up on by the assessee does not help the assessee. The question in the instant case is whether the block of assets consisting of vehicles which were claimed to be running them on hire is eligible for 30% Depreciation or 15% Depreciation depending on usage of vehicles. There was no segregation of the assets in a block in this case. The assessee failed to prove that the vehicles were put to use for commercial purpose. No explanation was offered by the assessee either before the AO or before the Ld. CIT(A), hence it was considered that the entire block of vehicles in the higher rate of depreciation was shifted for normal depreciation according to the usage of vehicles, hence there is no deviation from the decision of Hon ble High court and the same is helpful to the revenue on the facts of the case. 7.2 In the instant case, the assessee failed to produce the evidence before the A.O. or before the CIT(A) to show that the vehicles were running on hire. The vehicles were put to use for the assessee s business purposes. As per Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for revision for incorrect set off of business loss against the rental income. After verification of the material on record, the Ld.CIT has dropped the issue with regard to incorrect set off of business loss against the income from property which was examined by the assessing officer. During the course of revision proceedings, it has come to the notice of Ld.CIT that the assessee has made investments in shares and bonds and did not make disallowance which was required to be made u/s14A of IT Act. The assessee explained that there were no expenses incurred in relation to the exempt income which was claimed as deduction for the assessment year 2009-10. Hence, the assessee argued before the Ld.CIT that Section 14A is not applicable in assessee s case. As per the observation of the Ld.CIT, the assessee made the investments to the tune of ₹ 19,90,625/- in shares and bonds from the borrowed funds and the interest expenditure relating to the earning of dividend income is required to be disallowed u/s 14A. Though CIT opined that the expenditure relating to the earning of dividend income required to be disallowed, there was no finding given by the CIT in his order with regard to ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 37BA of the Act and disallowed the balance amount of TDS. The assessee filed appeal requesting to allow the entire credit for TDS. As per section 199 read with rule 37B of the Act, the credit for tax is allowed only on the income admitted relatable to the TDS. Therefore, in the absence of the receipt not being admitted for the assessment year under consideration, we do not find any error in the order of the Ld. CIT(A) and the same is upheld. 12. Ground No.3.1 is related to the alternate ground with regard to TDS claim restricted by the A.O. The A.O. allowed TDS of ₹ 12,12,924/- in the assessment year under consideration out of the TDS amount of ₹ 70,61,000/- made by the DGNP Visakhapatnam. The assessee has requested as an alternate ground to allow the credit for TDS of the balance amount in the subsequent year as and when the income is admitted. The A.O. is directed to allow the credit for TDS in the subsequent years as and when the income is admitted as per law. This ground is allowed for statistical purposes. 13. Ground Nos.4 5 are general in nature which does not require specific adjudication. 14. In the result, the appeal filed by the assessee is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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