TaxTMI 
TaxTMI 
2012 (7) TMI 965
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....s against the stand of the appellant that it was a capital loss. 4. That the CIT(A) erred in confirming the levy of interest u/s 234B and 234D. On facts and in law the said interest was not chargeable at all. 5. That the CIT(A) erred in upholding the action of the Assessing Officer in withdrawing interest u/s 244A. 6. That the appellant craves leaver to reserve to itself the right to add, alter, amend, substitute, withdraw and/or vary any ground(s) of appeal at or before the time of hearing. I.T.A. No.4799/Del/2007: (Departmental appeal): 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 53,67,000/- made u/s 14A of the Income Tax Act, 1961 . 2. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. 2. The brief facts of the case are that that the assessee is a non banking finance company and is governed by the Reserve Bank of India guidelines issued from time to time. These guidelines are mandatory which an NBFC has to follow while computing the net profits of the company. The assessee is also engaged in the busi....
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....s clearly attracted in this case and any expenditure relatable to earning of exempt income shall have to be disallowed. No evidence has been furnished by the assessee company to establish that no expense has been incurred in earning of interest income from bonds. This is specially required in the light of fact that certain expenses like salary, employees welfare expenses, postage and telegram expenses, traveling and conveyance expenses and rent etc. are common expenses with regard to dividend income/interest free income and normal/regular business activity of the assessee company -------- The disallowance of administrative expenses and interest expenses on earning of tax free interest/income claimed exempt is also held/permitted by the verdict of Hon'ble Supreme Court in the case of CIT v. United General Trust Ltd. 200 ITR 488 (SC)------. The Assessing Officer then calculated an amount of Rs. 53.67 lakhs being amount of interest paid attributable to earning of exempt income and made the addition accordingly. 6. Before Ld CIT(A), the Ld AR submitted that Assessing Officer has not proved any nexus between the expenditure incurred vis-a-vis earning of exempted income and relied....
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....ed in its favour for statistical purposes. 12. Now we take up the assessee's appeal. 13. The first ground of appeal relates to disallowance of excess depreciation being @ 40% on vehicles which had been leased out. The Assessing Officer during assessment proceedings noted that the assessee had claimed depreciation on motor lorries/taxis and motor cars etc, at higher rate of 40% in case of motor lorries/taxies and 25% and in respect of motor cars instead of normal depreciation @ 20%. The Assessing Officer noted that during previous year also addition was made on similar grounds for claiming excess depreciation. Therefore, the Assessing Officer made an addition of Rs. 80,54,344/- on account of excess depreciation. During appellate proceedings, the Ld AR submitted as under:- 1. That Hon'ble ITAT has accepted higher rate of depreciation right up to the assessment year 2002-03. 2. That there are no fresh leasing transactions during the year. 3. That submissions related to this ground of appeal are identical to these tendered in assessment year 2003-04. 14. The Ld CIT(A), however, did not agree with the submissions made by the assessee and upheld th....
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.... the burden of proof squarely lies on the appellant to show that it has claimed depreciation rightfully. In the case of H.E.H. Nizam's Religious Endowment Trust v. CIT (1966) 59 ITR 582, 587 (SC) it is held that to earn the exemption, the assessee has to establish that his case clearly squarely falls within the ambit of the exempting provisions of the Act but like earlier assessment year 2003-04, the appellant for the year under consideration has failed to discharge its onus to prove that the depreciation at higher rate of 40% has been claimed rightly,. After considering the fact that the issue has been decided against the appellant in the appellate order dated 21.6.2007 for assessment year 2003-04 and that there is no material change in the facts and circumstances of the case for the year under consideration as compared to the last year, I am inclined to uphold addition of Rs. 80,54,344/-". 15. Aggrieved, the assessee is in appeal before us. 16. At the out set, the Ld A argued before us that no fresh leasing transaction was done during the year under consideration. The depreciation was claimed at the opening balance of WDV brought forward from previous year and during previo....
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....ved, the assessee is in appeal before us. 22. At the outset, ld AR submitted that long term loss had occurred on sale of Govt. securities which are different from shares. He further pleaded that explanation to section 73 refers to sale/purchase of shares only. In this respect, he invited our attention to page 38 of paper book wherein complete details of securities where from loss had occurred were placed. 23. On the other hand, Ld Dr stressed that wherever a NBFC deals with shares, section 73 comes into application and she relied upon the order of Assessing Officer and Ld CIT(A). 24. We have heard the rival submissions of both the parties and have gone through the material available on record. Explanation to section 73 reads as follows:- "Where any part of the business of a company other than a company whose gross total income consist mainly of income which is chargeable under the head interest on securities, Interest from house property, capital gains and income from other sources, or a company the principle business of which is a business of banking or the granting of loans and advances consist in the purchase and sale of shares of other companies, such company ....