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TMI Blog2015 (2) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... s the AO) in restricting the deduction u/s.80HHC of the I.T. Act by invoking provisions of section 80IA(9) of the Act, while giving effect to the order of the ITAT. It has been contended that the Ld. AO has exceeded his jurisdiction while doing so. The Ld. Counsel for the assessee has brought our attention to the fact that earlier the matter on the issue had travelled to this Tribunal and the Tribunal while deciding the issue under consideration had accepted the contention of the assessee regarding netting of the expenditure incurred in relation to the income of the assessee while computing deduction u/s.80HHC. The Tribunal vide order dated 25.01.2008 passed in ITA No.6036/M/04 has restored this issue to the file of the AO to exclude only net other income after examining the nexus between the expenditure incurred in the earning of other incomes and giving an adequate opportunity of hearing to the assessee to substantiate its claim by submitting necessary evidences. The Ld. AO, while giving effect to the order of the Tribunal, observed that the assessee could not furnish the details of expenditure incurred in relation with earning such other/rental income. So he disallowed the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 On the facts and in the circumstances of the case and in law, the learned CITA) erred in disallowing the depreciation of Rs. 57,666/- on the assets purchased from M/s Pravin Metal Corporation. 3. Re: Disallowance u/s. 14A of Rs. 1,09,69,810/- 3.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding disallowance u/s 14A read with rule 8D amounting to Rs. 1,09,69,810/-. 3.2 The learned CITA) ought to have considered that the Appellant had sufficient own / interest free funds and an investment made ought to have been considered as made out of own interest free funds. 3.3 Without prejudice to the above, the disallowance u/s. 14A ought to be substantially reduced. 4. Re: Disallowance of depreciation claimed under Rule 5 (2) Rs. 2,60,79,911/-: 4.1 The Assessing Officer grossly erred in disallowing depreciation benefit under Rule 5(2) of Income Tax Rules to the tune of Rs. 2,60,79,911/- on the technical ground that the Appellant was not able to produce the certificate from Department of Scientific and Industrial Research (DSIR). 5. Re: Levy of Interest u/s 234B in respect of 14A Disallowance: 5.1 The learned CITA) grossly e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO for the limited purpose of verification of the above stated certificated dated 05.08.2011 and if verified to be correct, the AO to allow the claim of the assessee accordingly. Since no such certificate is available for the Thane unit hence, the claim for Thane unit on this issue is not allowable. Ground No.2: Depreciation on assets purchased from Pravin Metal Corporation :- 7. At the outset, Ld. Counsel for the assessee has stated at bar that for the earlier assessment years i.e. assessment years 1999-2000, 2000-01 in ITA No.6036/M/04 and othr., order dated 25.01.2008 and further for assessment years 2001-02 and 2002-03 in ITA No.8387/M/04 and another order dated 30.03.2012 and further for the assessment year 2003-04 in ITA No.370/M/09 order dated 12.9.2012 the matter has been restored to the file of the AO to decide it a fresh. The operating part of the order dated 12.09.2012, for the sake of convenience is reproduced as under; "13. Ground no.3, relates to disallowance of depreciation Rs. 1,36,889, on the asset purchased from Pravin Metal Corp. 14. Before us, both the parties agree that this issue has been considered by the Tribunal in assessee's own case for asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity of being heard to the assessee." 8. In view of the above directions of the Tribunal given in earlier years, the issue for this year is accordingly restored to the file of the AO to decide it in the light of the directions as reproduced above and after providing due opportunity of being heard to the assessee. Ground No.3- Disallowance u/s.14A of the Act:- 9. The Ld. Counsel has brought our attention of the fact that in the earlier assessment years i.e. A.Y.1999-2000, 2001-02 & 2002-03 and A.Y. 2005-06 disallowances have been restricted by the Tribunal to 2% of dividend income received by the assessee. The relevant year before us being 2005-06, rule 8D of the income Tax Rules is not applicable for this year as has been held by the Hon'ble Bombay High Court in the case of "Godrej & Boyce Mfg. Co. Ltd. vs. DCIT" (2010) 328 ITR 81 (Bom) that the same is applicable from assessment year 2008-09 on words. In view of the consistent finding of the Tribunal for earlier assessment years, restricting disallowance u/s.14A to the extent of 2% of dividend income, we accordingly restrict the disallowance of the expenditure u/s.14A to 2% of dividend income accordingly. Ground No.4- Depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee debited computer software expenses of Rs. 10,99,800/- to its P&L account and claimed it as Revenue expenditure. The AO, however, treated the same as capital expenditure and allowed the depreciation at the rate of 60% thereupon. The Ld. CIT(A) also held that the software purchased by the assessee was for use on long term basis, giving enduring benefit to the assessee. He, therefore, upheld the finding of the AO in this respect. The assessee has thus come in appeal before us on this issue. 14 We have heard the rival contentions. The Ld. AR of the assessee has brought our attention to the relevant invoice dated 07.09.06 wherein description is mentioned as : SAP Post implementation support charges from 7th Sept. 06 to 6th Oct. 06 (A) Amount in 75000.00 (INR) + Service Tax (12.24%)(B)-9180.00, Grand Total (A+B)= 84180(INR). He has further invited our attention to the invoice dated 3rd July 2006 : "Ecan Corporate Edition Sever Client Version for 1 year Auto updates - Rs. 8000.00 + Vat @4%-320.00, Total Amount =8,320.00" 15. A perusal of the above description mentioned on the bills reveals that Software purchased was of use for a limited period. The software purchased vide/Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said deprecation. However, the same has not been disposed off by the AO. In view of our finding given above, this ground is decided accordingly. If the assessee has moved any application u/s.154 on this issue, the AO will dispose off the said application also while giving effect to our order on this issue. Ground No.4- Disallowance u/s.14A of the Act:- 18. This ground is identical to ground No.3 taken by the assessee in ITA No.7427/M/10 for assessment year 2005-06. In view of our findings given above, the disallowance on this issue is restricted to 2% of the Dividend income accordingly. Ground No.5- Depreciation on assets purchased from Pravin Metal Corporation:- 19. This ground is identical to ground no.2 of the assessee's appeal in ITA No.7427/M/10 for assessment year 2005-06. In view of our findings given above, this issue is accordingly restored to the file of the AO. ITA No.01/M/2012 for assessment year 2007-08 (Revenue's Appeal):- Ground No.1- disallowance u/s. 14A of the Act:- 20. This issue has also been discussed in assessee's appeal and disallowance has been restricted to 2% of dividend income. This ground is decided accordingly. Ground No.2 - Interest on loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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