TaxTMI 
TaxTMI 
2005 (1) TMI 587
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.... perusal of P&L Account, Assessing Officer found that assessee's income consists of interest received, other income, profit on sale of investment, profit on sale of share and profit on sale of fixed assets. The assessee has also received dividend of Rs. 3,40,170 which is claimed as exempt under section 10(33). Assessing Officer accordingly asked the assessee to explain as to why the provision of section 14(A) should not be invoked because dividend is claimed exempt under section 10(33) of the Income-tax Act, 1961. In reply to this assessee explained that they have not borrowed any money in investment in shares and no interest has been paid nor debits to P&L account it was also claimed that expenditure cannot be allocated because they have n....
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....or the purpose of section 80M of the Act. The ld. CIT(A) found that the decision is distinguishable because Hon'ble Supreme Court in the case of CIT v. United General Trust Ltd. [1993] 200 ITR 488 held that proportionate management expenses are also required to be deducted for arriving at amount of dividend qualifying for deduction under section 80M of the Act. The Ld. CIT(A) further relied on the decision of Hon'ble Apex Court in the case of Consolidated Coffee v. State of Karnataka [2002] 176 CTR (SC) 98 wherein it is held that the apportionment of expenses on the basis of gross receipts from the agricultural and non-agricultural activities was justified in the absence of relevant details. Aggrieved by this order of the Ld. CIT(A) assesse....
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....reciation of Rs. 11,36,970 cannot be apportioned because depreciation also pertains to in respect of building of godown. Further, depreciation is not an expenditure but an allowance. In support of this contention reliance is placed on ITAT Mumbai Bench "E" (Third Member) decision in the case of Navin Bharat Industries Ltd. v. Dy. CIT [2004] 90 ITD 1. 5. Shri D.S. Benupani, DR appeared for the revenue, supported the order of the CIT(A). The Ld. DR drew our attention to detail of expenses which inter alia include Demat charges of Rs. 63,324 share stamp charges of Rs. 18,936 and Director's remuneration of Rs. 1,20,000. The ld. DR submitted that depreciation is a replacement cost. As such, depreciation on motor-car, computer and office fixtu....
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....e. 8. In the assessment order, Assessing Officer disallowed administrative expenses and depreciation expenses on proportionate basis. It is the duty of the assessee to allocate the expenditure but in case the assessee fails to allocate the same, the Assessing Officer has no option but to disallow the same on proportionate basis. From the perusal of administrative and other expenses I find that assessee has incurred expenses on Demat for Rs. 63,324, Share Stamp charges of Rs. 18,936, the total of these two expenses works out to Rs. 82,260. In the assessment order the Assessing Officer has disallowed Rs. 73,608 only as expenses attributable to earning of dividend which is claimed exempt under section 10(33) of the Income-tax Act, 1961. Fro....