2012 (5) TMI 745

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....10. 2. The first issue is disallowance of depreciation on the Membership card of the Bombay Stock Exchange. 3. We have heard the parties. The assessee company is engaged inter alia in the business of share broking, depositaries, mobilisation of deposits and marketing of Public issues (PI). The assessee is Member of the Bombay-stock Exchange having two Membership cards. The assessee has claimed depreciation @ 25% on both the Membership cards on their WDV being Rs. 8,34,506/- and Rs. 15,66,211/- respectively. The A.O. disallowed the depreciation on both the Membership cards. 4. Now, this issue stands covered in favour of the assessee by the decision of Hon'ble Supreme Court in the case of Ongoing Shares vs. CIT 327 ITR 323. The Ld. D....

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....ue stands covered in favour of the assessee. We accordingly allow the claim of the bad debts and ground no.3 is allowed. 7. Ground no.4 & 5 are in respect of disallowance u/s.14A of Rs. 1,14,20,523/-. The A.O. made the disallowance u/s.14A in accordance with Rule 8D in respect of the expenditure incurred for earning the dividend income. Both the parties agreed that as assessment year involved is 2006-07 Rule 8D cannot be applied in view of the decision of the Hon'ble jurisdictional High Court in the case of DCIT vs. Godrej and Boyce Mfg. Co. Ltd. 328 ITR 81 (Bom). At the same time the A.O. can decide the reasonable expenditure which may be incurred for earning the dividend income or any other exempt income. We, accordingly, restore the i....

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....s to be decided in favour of the assessee. Moreover, the said issue is also covered by the decision of the jurisdictional High Court in the case of Otis Elevator Co. Ltd. (supra). We, therefore, delete the addition of Rs. 15 lakhs and allow ground no.6. 11. The next issue is the rate of depreciation in respect of UPS and this issue arises from ground no.7. 12. The A.O. has observed that the assessee has claimed 100% depreciation on UPS and batteries treating them as Automatic Voltage Controller. In the opinion of the A.O. as the assessee has claimed higher depreciation. The A.O. restricted the depreciation to 15% as against 80% claimed by the assessee. The assessee also contended that the UPS and batteries which are being utilised as ....