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TMI Blog2016 (8) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble jurisdictional High Court in the case of M/s Maxopp Investment Ltd [ 2011 (11) TMI 267 - DELHI HIGH COURT ] Depreciation at the rate of 60% on addition of computer peripherals, printers, UPS etc - AO and CIT (A) allowed the depreciation @ 15% on the basis that the UPS is not an integral part of the computer as the computer can function without these peripherals - HELD THAT:- As decided in own case [ 2014 (7) TMI 1314 - ITAT DELHI ] since the expenditure is with regard to the computer peripherals, printers, UPS which cannot be used stand alone, therefore, in view of the decision relied upon by the appellant, I agree that in the facts and circumstances of the appellant's case, he is entitled for depreciation @ 60%. Allowability of foreign travel and conveyance expenses - AR submits that the details of the foreign travel expenses have been provided in the paper book which include the provision for dividend - HELD THAT:- We agree with the contentions of the Ld. AR that the provision for dividend has been added back in the computation. Therefore we are inclined to modify the directions issued by the Ld. CIT (A) that the Ld. AO may allow the same as an expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee against the order dated 11/11/2013 passed by CIT (A) 28 New Delhi for assessment year 2007-08 on the following grounds of appeal: 1) The order of the Learned Assessing Officer is bad in law and on the facts and circumstances of the case. 2) The Learned Assessing Officer has erred in Law and on the facts of the case in making addition of Rs.8,25,697/- on account of commission paid to directors by the assessee company. 3. The Learned Assessing Officer has erred in Law and on the facts of the case in making addition of Rs.3,11,30,314/- (subsequently rectified to Rs.8,86,275) under section 14A on account of expenditure incurred for incurring dividend i.e. exempt income. 3.2 The Learned Assessing Officer has erred in Law and on the facts of the case in making addition of Rs.3,11,30,314/- under section 14A ignoring the prospective operation of Rule 8D of the Income-tax Rules, 1962 notified on 24 March 2008. 3.3 The Learned CIT(A) has erred in directing the Assessing Officer to decide the matter afresh ignoring the material and other facts brought on record. 4) The Learned Assessing Officer has erred in Law and on the facts of the case in making additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the addition made the assessee preferred an appeal before the Ld. CIT (A). The Ld. CIT(A) confirmed the addition so made by the Ld. AO. 2.5 Aggrieved by the order of the Ld. CIT (A) the assessee is in appeal before us now. 3. Ground No. 1, 8 and 9 are general in nature and do not call for any adjudication. 4. Ground No. 2: At the outset, the ld. AR submitted that ground No. 2 stands covered by the order of this Tribunal in assessee s own case for assessment year 2005-06 and 2006-07. He referred to the relevant pages of the order being 481-486 of the paper book. The findings of the tribunal are reproduced herein below: 17.3We have carefully considered the submissions and pursued the records. We find that assessee has paid commission to the Directors as part of the remuneration. In the agreement, it was clearly specified that commission is payable at 5% of the net profits of the company. Thus, the payment was duly approved by the Board of Directors. 17.4 We further find that Hon'ble Jurisdictional High Court in the case CIT vs. Dalmia Promoters Developers (P) Ltd. 281 ITR 346 has held that for rejecting the view taken in earlier assessment years, there must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable from assessment year 2008-09. We accordingly set aside this issue to the Ld. AO for calculating the disallowance under section 14 A of the act by applying the ratio laid down by the Hon ble jurisdictional High Court in the case of M/s Maxopp Investment Ltd (supra). 5.3 Accordingly ground No. 3 stands allowed for statistical purposes. 6. Ground No. 4: The assessee company had claimed depreciation at the rate of 60% on addition of computer peripherals, printers, UPS etc. The Ld. AO and the Ld. CIT (A) allowed the depreciation @ 15% on the basis that the UPS is not an integral part of the computer as the computer can function without these peripherals. 6.1 The ld.AR submitted that for assessment year 2008-09 the Ld. CIT(A) had allowed the depreciation on computer peripherals printers and the UPS @ 60%, against which the revenue had preferred an appeal before this Tribunal. He referred to page 488 of the paper book where the relevant order for assessment year 2008-09 has been placed in assessee s own case. This tribunal has dismissed the appeal filed by the revenue thereby upholding the findings of the Ld. CIT (A) which is as under: Disallowance of Rs.7,07,412 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions and explanation provided by the assessee has remanded the issue back to the Ld. AO to verify the facts stated by the assessee and to allow the claim accordingly. 7.2 Aggrieved by the directions of the Ld. AO the assessee is in appeal before us now. 7.3 The Ld. AR submits that the details of the foreign travel expenses have been provided in the paper book at page 189 which include the provision for dividend amounting to Rs.31,66,650/-. He submitted that these details has been provided to the Ld. AO at the time of assessment proceedings as is evident from the letter dated 11/11/2009 placed at page 171 of the paper book addressed to the Ld. AO. The Ld. AR submitted that the accounts have been prepared as required by Schedules VI to the Companies Act, 1956. He submitted that the provision or dividend has already been added back to the profits of the assessee as per the financials for the computation of taxable income. He referred to page 98 of the paper book where the actual payment has been added back. 7.4 On the contrary the Ld. DR supported the orders passed by the authorities below. 7.5 We have perused the details and the orders passed by the authorities in speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. 8.4 On the contrary the Ld. DR submitted that assessee has not submitted any details in respect of the payments made to the non-resident in the form of any agreement, MOU etc. He submitted that whether the payment has been made wholly and exclusively for the purpose of business needs to be verified. 8.5 We have perused the details and the orders passed by the authorities in specific reference to the paper book relied upon by the assessee. It is observed that the Ld. AO has not verified the details in respect of the submissions made by the assessee till date. The Ld. AR has placed reliance upon the certificate issued by the Chartered Accountants for the assessee dated 3rd of November 2006, which was a part of the additional evidence demanded to the assessing officer for verification by the Ld. CIT (A). It has also been further submitted by the Ld. AR that no payment arises or accruing in India as the services are rendered outside India and the payment is also made outside India. The certificate relied upon by the Ld. AR is placed at page 310 of the paper book and that the said payment has been made in terms of invoice No. 64 dated 17/09/2009 as per MOU dated 10/07/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d debt and advances reimbursed amounting to Rs.23,39,405/- as bad debts being outstanding for more than a year and a recovery was remote. The assessee claimed the said amount as bad debt under section 36 (1) (vii) of the act. The Ld. AO rejected assessee s contentions as the companies were well-known group and there was no reason for the bad debts to become bad. 9.1 Aggrieved by the order of the Ld. AO assessee preferred an appeal before the Ld. CIT (A). 9.2 The Ld. CIT (A) held that the assessee had not given any evidence that the amount was reflected in the earlier in its P L account. Relying upon the decision of Hon ble Kerala High Court in the case of M/s Travancore TS State company Ltd Vs. CIT reported in 197 ITR 528, he upheld the actions of the AO and confirmed the addition. 9.3 Aggrieved by the order of the Ld. CIT (A) the assessee is in appeal before us now. 9.4 The Ld. AR has submitted that the authorities below has not disputed regarding the said amount being offered to tax in the preceding years. He submitted that the authorities below has ignored the evidence and submission placed on record wide letter dated 11/09/2013 and 31/10/2013 whereby details/documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AO under section 14 A on account of expenditure incurred for earning dividend income during the year under consideration. At the outset the Ld. AR submitted that the issue needs to be restored back to the Ld. AO by relying upon the order of this Tribunal in assessee s own case for assessment year 2009-10 in ITA No. 4563/del/2012 placed at page 228 of the paper book. He referred to para 12 of the said order wherein this Tribunal has dealt as under: 12.) As regards ground No.1 in IT.A.No. 4563/De1/2012, and ground No.2 in IT.A.No. 4706/De1/2012 with regard to upholding of partial disallowance u/s 14A, we find that Ld. CIT(A) has not considered the submissions of the assessee regarding break-up of investment which included investment in group companies and also has not considered that a major part of investment in mutual funds was in debt related investments where the investments generally earn fixed income but distribution of income is in the form of dividends. We are of the opinion that fixed maturity plans offered by mutual funds definitely require much less professional expertise as compared for making investments in equity related schemes and therefore, less expenditure ..... 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