ITAT Decision: Disallowance under Section 14A upheld, exemption criteria applied.

The ITAT upheld the deletion of disallowance under section 14A for Assessment Year 2011-12, restricting it to the exempt income. However, it allowed the disallowance of depreciation on Weighing Scales for the same year. For Assessment Year 2012-13, the ITAT upheld the deletion of disallowance under section 14A due to the absence of exempt income. The disallowance of higher depreciation on Weighing Scale was upheld, but the appeal regarding disallowance in the absence of exempt income was remanded for further consideration. The Revenue's appeals were partly allowed, and the assessee's appeal was allowed for statistical purposes.

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Issues:
1. Disallowance under section 14A r.w. Rule 8D of I.T. Rules for Assessment Year 2011-12.
2. Claim for depreciation on Bizerba Weighing Scales as part of computer.
3. Disallowance made u/s. 14A and depreciation on Weighing Scale for Assessment Year 2012-13.

Issue 1: Disallowance under section 14A r.w. Rule 8D of I.T. Rules for Assessment Year 2011-12:
The appeal dealt with the deletion of disallowance under section 14A r.w. Rule 8D of I.T. Rules for the Assessment Year 2011-12. The Assessing Officer disallowed a certain amount, which was later restricted by the Ld.CIT(A) to the exempt income received by the assessee during that year. The ITAT upheld the Ld.CIT(A)'s decision, citing precedents from the Punjab & Haryana High Court and the Mumbai Bench. The ITAT emphasized that the disallowance under section 14A should not exceed the exempt income, leading to the rejection of the Revenue's grounds on this issue.

Issue 2: Claim for depreciation on Bizerba Weighing Scales as part of computer:
The dispute revolved around the claim for depreciation on Bizerba Weighing Scales as part of a computer. The ITAT referred to a previous Tribunal order that decided against the assessee, upholding the disallowance made by the Assessing Officer. The ITAT concurred with this decision, stating that the Weighing Scale did not qualify as part of a computer and therefore was not entitled to the claimed depreciation. Consequently, the Revenue's ground on this issue was allowed.

Issue 3: Disallowance made u/s. 14A and depreciation on Weighing Scale for Assessment Year 2012-13:
For the Assessment Year 2012-13, the Revenue appealed against the deletion of disallowance under section 14A and depreciation on Weighing Scale. The assessee also appealed against the Ld.CIT(A)'s decision to sustain the suomoto disallowance made by the assessee under section 14A. The ITAT upheld the Ld.CIT(A)'s deletion of the disallowance under section 14A as the assessee had not earned any exempt income during that year. Citing a Bombay High Court decision, the ITAT emphasized that disallowance under section 14A requires income that does not form part of the total income. On the issue of higher depreciation on Weighing Scale, the ITAT followed a previous Tribunal order against the assessee, upholding the disallowance made by the Assessing Officer. The assessee's appeal regarding the disallowance in the absence of exempt income was restored to the Ld.CIT(A) for further consideration. Consequently, the Revenue's appeals were partly allowed, and the assessee's appeal was allowed for statistical purposes.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the decisions rendered by the ITAT in each case.

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