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TMI Blog2019 (1) TMI 1962X X X X Extracts X X X X X X X X Extracts X X X X ..... @60% on the equipments connected to V-SAT (i.e. Transformer, UPS etc.). 2). The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in restricting the disallowance of administrative expenses u/s.14A of the IT. Act to Rs. 5,00,000/- out of Rs. 56,21,000/- made by the A.O. 3.The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance amounting to Rs. 39,08,141/-made by the Assessing Officer on account of payment made in respect of provision for Employee Long-term Compensation Plan (ELTCP). 4.The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 12,06,824/- made by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to V-SAT of Rs. 4,27,545/-. (ii) Disallowance u/s. 14A in the nature of administrative and interest expenditure of Rs. 56,21,000/-. (iii) Disallowance of Rs. 39,08,141/- paid in respect of provision for Employee Long Term Compensation Plan. (iv) Disallowance of Rs. 12,06,824/- for garden expenses. (v) Disallowance of weighted deduction claimed u/s. 35(2AB) of the Act on recurring expenses of Rs. 60.85 lacs related to building, municipal taxes and salary to Mr. C. Dutt. 3. And against the disallowances/additions, assessee preferred first statutory appeal before the ld. CIT(A) who partly allowed the appeal of the assessee. 4. Now Revenue is before us by way of an appeal. 5. First we would like to discuss the ground related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, this ground of revenue is dismissed. 10. Now we come to ground no. 2 that ld. CIT(A) has erred in law and on facts in restricting the disallowance of administrative expenses u/s. 14A of Income Tax Act to Rs. 5,00,000/- out of Rs. 56,21,000/- made by the A.O. 11. Ld. A.O. has discussed this issue at page no. 10 to 17 in Para 9 and ld. CIT(A) has discussed at page no.11 to 21 in Para no. 6. 12. In this case, assessee had earned tax free dividend income of Rs. 33.81 lakhs during the year under consideration. And assessee had made investment in Mutual funds, NSC, Investments in foreign subsidiaries and investments in the form of contribution to Gujarat Venture Capital Fund to the tune of Rs. 14695 were made and therefore is having sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for such expense was not made in the books of accounts. However, as the said provision pertained to the services rendered by the employees for the F.Y. 2005-06, therefore, assessee had claimed such expenses while computing taxable income under Income Tax Act. 18. As we can see, ld. A.O. had disallowed the provision for leave encashment as no payment has been made against the said provision during the year. In the case of Bharat Earth Movers Hon'ble Supreme Court has held if a liability has been ascertained with a reasonable certainty and the actual quantification is not material to claim the expenditure. 19. Therefore, respectfully following the aforesaid Hon'ble Supreme Court judgment and in our considered opinion, the ld. CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation on motor car. 28. Ld. CIT(A) has discussed at page no. 41 in Para no. 10. As we can see, in assessment year 2005-06, predecessor of the ld. CIT(A) allowed the claim regarding depreciation in respect of motor car and capitalization of interest has been allowed. As ld. CIT(A) has followed earlier year and there is no appeal by the Revenue against the said order. Therefore, we do not want to interfere in the said order. Thus, this ground is dismissed. 29. In the result, appeal filed by the Revenue is dismissed. 30. ITA No. 259/Ahd/2012 Assessee's appeal. The Assessee has taken following grounds of appeal. 1.On the facts and in the circumstances of the case, CIT(A) erred in not upholding the Assessee's claim for deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has held that so far as disallowance of administrative expense is concerned, there is no precious formula or proportionate disallowance, no disallowance called for, for proportionate administrative cost, attributable to earning of tax free income until Rule 8D of the IT. Rule, 1962 came into force. It is further held that the proportionate disallowance u/s. 14A should be limited to only interest liability and not overhead or administrative expenditure, which should be considered for disallowance under Rule 8D of the IT. Rule, 1962 from 2007-08. Respectfully following the ratio in the case of Catholic Syrian Bank Ltd.& Ors. (supra) we hereby delete the addition made on account of administrative expenses. This ground of assessee's appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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