9911796707
TMI Blog2024 (9) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... 56/Del/2017 for A.Y. 2011-12 arises out of the order by the Commissioner of Income Tax (Appeals)-15, Delhi dated 29.03.2017 (hereinafter referred to as ld CIT(A) in short) against the order of assessment passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') dated 20.02.2015 (for A.Y. 2012-13) and dated 04.03.2014 (for A.Y. 2011-12) by the Assessing Officer (hereinafter referred to as ld. AO). 2. Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. 3. Let us take up the appeal for the A.Y. 2011-12 in ITA No.2956/Del/2017 first. The Ground Nos.1 and 1.1 raised by the assessee are challenging the disallowance ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suo moto disallowance of Rs. 36,54,208/- by considering the salary of Key Managerial Personnel (KMP), salary of Accountant, Communication Cost, Travelling and Conveyance Exps. & Printing and Stationary. Since the total dividend income contributed 16.86% of the total Revenue of the Company, the assessee took 16.86% of the aforesaid expenses as attributable to earning of dividend income and disallowed a sum of Rs. 36,54,208/- under section 14A of the Act. The working of the same is enclosed at page 94 of the paper book. The learned AO completely ignored the suo moto disallowance made by the assessee and proceeded on the premise that no suo moto disallowance was made by the assessee. This is evident from observation made by the learned AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive satisfaction with the cogent reasons as to why such disallowance made by the assessee is incorrect and thereafter resort to proceed with the computation mechanism provided in Rule 8D(2) of the Rules. This is mandate of law provided in section 14A(2) of the Act r.w. Rule 8D(1) of the Rules. Since the same is conspicuously absent in the instant case, we hold that the disallowance made by the learned AO under section 14A of the Act deserves to be deleted. Hence, we hold that only a sum of Rs. 36,54,208/- being the suo moto disallowance made by the assessee in the return of income under section 14A should be sustained. Accordingly, Ground Nos.1 and 1.1 raised by the assessee are allowed. 7. The ground Nos. 2, 2.1 & 2.2 raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 in ITA No. 1629/Del/2012 dated 31.01.2024. The only difference being in earlier years, the assessee had raised an additional ground claiming the cost of painting as a Revenue expenditure before the Tribunal. Whereas for the year under consideration, the same was raised as an additional ground before the learned CIT(A) itself. The learned CIT(A) also placed reliance on the order passed by his predecessor for A.Y. 2008-09 and disallowed the depreciation on paintings by also making an enhancement thereon by treating the cost of painting as a capital expenditure. As stated earlier, this issue is no longer res integra in view of the decision taken by this Tribunal in assessee's own case for A.Y. 2008-09 in ITA No. 1629/Del/2012 dated 31.01.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut office / commercial space and provides facility management services to its tenants. During the year under consideration, the assessee had earned service income of Rs 6.81 crores. It was submitted that the paintings / works of art constitute part of interior decoration to improve aesthetics of the reception and common area of the buildings, which are regularly visited by its clients and from the assessee is deriving income. The assessee buys customized paintings which are regularly replaced after few years with other contemporary paintings, shuffles the location of the paintings, puts them in new locations in the common areas etc, in order to provide world class interiors to its clients, both existing and prospective, with a view to obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the depreciation claimed by the assessee on the paintings during the year under consideration and in the subsequent years are to be disallowed. The Ground No.3 raised by the assessee is dismissed and Additional Ground No. 3.1. raised by the assessee is allowed." 11. In view of the above, we hold that cost of paintings is to be considered as Revenue expenditure and accordingly ground no. 3 is allowed. In view of the decision on ground no.3, the ground no.3.1 become infructuous. 12. In the result, the appeal of the assessee for A.Y. 2011-12 is partly allowed. Assessee's appeal in ITA No.2957/Del/2017 for A.Y. 2012-13 13. All the grounds raised by the assessee in its appeal for A.Y. 2012-13 are identical with those grounds raised by it in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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