2014 (11) TMI 1030

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....ppeals are common, they are heard together and disposed off by this common order for the sake of convenience. ITA Nos.1236 & 1240/Mds/2014 (A.Y.2006-07 & 2008-09): 2. These two appeals are filed by the Revenue for the assessment years 2006-07 and 2008-09. The only issue in both these appeals is that Commissioner of Income Tax (Appeals) erred in allowing depreciation on UPS at 60% as against 15% allowed by the Assessing Officer. At the time of hearing, counsel for the assessee submits that the issue in appeal has been considered by this Tribunal in the case of DCIT Vs. Indian Overseas Bank in ITA Nos. 1803 & 1815/Mds/2011 dated 2.4.2013 and decided that UPS is eligible for depreciation at 60%. Counsel placing reliance on the said decision....

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....eramics & Industries Ltd., reported as 56 DTR (Del) 397, wherein the Hon'ble High Court has allowed depreciation @ 60% on UPS treating it as part of computer hardware. On the other hand, learned DR relied on the order of the Delhi Bench of the Tribunal in the case of Nestle India Vs. DCIT., reported as 111 TTJ 498 wherein the Tribunal has held UPS at par with plant and machinery and rejected the contention of assessee to treat it as part of computer. 28. We do not agree with the submissions of the AR that the UPS is an energy saving device, therefore, depreciation @ 80% should be granted. However, we are in consonance with the decision of Hon'ble Delhi High Court in the case of Orient Ceramics & Industries Ltd. (supra), wherein the Hon'b....

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....f their own funds and there were no borrowing cost. The Assessing Officer rejected the contentions of the assessee that it had not incurred any expenditure in respect of investments. The Assessing Officer was of the view that since the assessee invested substantial amount around Rs. 129.61 crores as on 31.3.2008, Rs. 120.68 crores as on 31.3.2009 and Rs. 135.78 crores as on 31.3.2010 in equity and mutual funds, it cannot be said that the assessee has not incurred any expenses for managing these investments. Therefore, invoking the provisions of section 14A read with Rule 8D(iii) the Assessing Officer disallowed 0.5% of average investment as expenditure attributable for earning dividend income. On appeal, the Commissioner of Income Tax (Appe....

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....le 8D(iii). 9. Departmental Representative vehemently supports the orders of lower authorities. 10. We have heard rival contentions of both the parties and perused orders of lower authorities and the decision relied on. On a careful consideration of the facts and circumstances of the case, we are not in agreement with the assessee that no expenditure was incurred in managing the portfolio of the assessee. The assessee company is into the business of registrars and share transfer agent. It is not in dispute that management of the assessee company periodically monitors through its Board of Directors about the investments. In such circumstances, it cannot be said that assessee has not at all incurred any expenses in managing its portfolios. ....