TaxTMI 
TaxTMI 
2014 (2) TMI 1114
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.....2. Without prejudice to the above, the learned CIT(A) ought to have rectified errors in computation of disallowance u/s 14A read with Rule 8D. 3. The Appellant craves leave to add to, alter, amend or delete any ground of Appeal. Following grounds of appeal have been filed by the assessee for AY 2008-09:- 1. Re: Disallowance of the additional depreciation of Rs. 9, 91, 139 u/s. 32(1)(iia): 1.1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) [hereinafter referred to as 'the learned CIT(A)'] has erred in upholding the disallowance of balance additional depreciation of 10% on additions made in AY 2007-08. 1.2. The learned CIT(A) ought to have considered that provisions giving benefit to the Assessee should be liberally interpreted. 2. Re: Disallowance u/s 14A amounting to Rs. 14, 87, 716/-: 2.1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding disallowance of interest amounting to Rs. 12, 96, 459/- and administrative expenses of Rs. 1, 91, 257/- u/s 14A. 2.2. The learned CIT(A) ought to have considered that the appellant have not received any exempt ....
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.... 10% additional depreciation was claimed in AY 2006-07, that balance 10% was claimed in the AY 2007-08, that word shall use in section 32(1)(iia) signify that 20% deduction had to be allowed for additional depreciation in any case, that the depreciation provisions should be interpreted in a liberal manner.After considering the submissions of the assessee. FAA held that if machinery was used for less than 180 days in any previous year additional depreciation was to be allowed @ 50% only, that the intention of the legislature was not to allow balance 50% additional depreciation in the subsequent year, that Act does not specifically provide for the additional depreciation to be allowed in the subsequent AYs. 6.Before us, Authorised Representative(AR)submitted that additional depreciation, as per the provisions of section 32(1)(iia), has to be allowed @ 20%, that assessee had claimed additional depreciation @ 10% for the year under consideration as the machinery was not used for more than 180 days, that balance 10% depreciation was claimed in the AY under appeal, that assessee was entitled to claim such depreciation if it could not claim the depreciation @ 100% in earlier AY. AR rel....
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.... benefit to the setting up new industrial undertakings making or for expansion of the industrial undertaking by way of making more investment in capital goods. Thus, these are incentives aimed to boost new investments in setting up and expanding the units. XXXXXXXXXXXXXXX Thus, this incentive in the form of additional sum of depreciation is not available to any plant or machinery which has been used either within India or outside India by any other person or such machinery and plant are installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house or any office appliances or road transport vehicles, or any machinery or plant, the whole of the actual cost of which is allowable as deduction (where by way of depreciation or otherwise) in computing the total income under the head "Profits and gains of business or profession" of any one previous year. Thus, the intention was not to deny the benefit to the assets who have acquired or installed new machinery or plant. The second proviso to section 32(1)(ii) restricts the allowances only to 50% where the assets have been acquired and put to use for a period less than 180 day....
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....year, if the entire depreciation was not allowed in the first year of installation of machinery. Similar view was taken by the Delhi Bench of Tribunal in the case of SIL Investment Ltd.(supra). Respectfully following the orders of the coordinating benches, we decide Ground No.1 in favour of the assessee. 8.Ground No.2 is about disallowance made u/s. 14A of the Act. During the assessment proceedings, AO found that the assessee had made investment at Rs. 2.67 Crores in its group concerns, that the assessee had not shown to have earned any taxable income from group concerns. He held that income like, dividend if any, received by the assessee-company in future from the sister concerns were exempt from taxation.Accordingly, he allocated proportionate expenditure for earning income to be determined u/s. 14A of the Act r.w.Rule 8D of the Income Tax Rules, 1962 (Rules) at Rs. 6, 83, 301/-. 9.Assessee preferred an appeal before the FAA. After perusing the submissions of the assessee and the assessment order, he held that assessee did not offer any dividend income during the year under appeal, that it claimed that no expenditure was attributed for earning exempt income on the ground....