2017 (4) TMI 441

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.... appeal assessee has raised the following Grounds of appeal:- " The grounds set out below are without prejudice to one another: 1. The CIT (A) erred in upholding the action of the Assessing Officer in restricting the depreciation on computer software, purchased and forming part of the head "Depository System" @ 25% only being the rate applicable to "intangible assets", instead of @60%, which is the rate of depreciation admissible on computers and computer software, as claimed by the Appellant in its Return of Income. 2. The CIT(A) erred in upholding the disallowance under section 14A to the extent of Rs.I0,39,345/- being 2% of the exempt income. 3. The CIT(A) erred in not adjudicating the following grounds of appeal raised before him....

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.... providing depository services. For assessment year 2006-07, it filed a return of income declaring the total income at Rs. 45,95,35,519/-, which was subject to a scrutiny assessment, whereby the total income has been assessed at Rs. 50,60,55,400/- after making certain addition/disallowances. The CIT(A) has allowed partial relief and not being satisfied with the order of the CIT(A) assessee is in further appeal before us on the aforestated Grounds of appeal. 4. In so far as, Ground of appeal No.1 is concerned, the same relates to the rate of depreciation allowable on computer software. In the return of income assessee had claimed depreciation on computer software @60%, whereas the Assessing Officer has allowed it @25%. As per the Assessing ....

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....omprising of interest on tax free bonds of Rs. 5,19,57,250/-. The Assessing Officer noticed that since assessee had received exempt income during the year, the provisions of section 14A of the Act were attracted so as to disallow the expenditure incurred in relation to earning of such income. The Assessing Officer noticed that in preceding assessment years of 2002-03 to 2005-06, 2% of the concerned exempt income was treated as an expenditure attributable to such exempt income and accordingly disallowed under section 14A of the Act. However, as per the Assessing Officer, the computation in this year is liable to be determined in terms of rule 8D of the Income Tax Rules,1962( in short 'the Rules') and he accordingly determined a sum of Rs. 47....