TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 874
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther and are being disposed of by this common order, for the sake of convenience. 2. The assessee is engaged in the business of providing global research services. We shall first take up the appeal filed by the assessee for assessment year 2007-08. The first issue relates to the claim of higher depreciation @ 60% as applicable to Computers on CCTV cameras and Control access systems. The assessee claimed higher rate of depreciation on the above said items on the plea that they form part of computer systems. The AO, however, allowed depreciation at normal rate and the Ld CIT(A) also confirmed the same. 3. We heard the parties on this issue. The Ld A.R submitted that the CCTV systems and Control access systems are forming part of computer sy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow depreciation at higher rate as applicable to computers. 6. The next issue contested by the assessee relates to the partial disallowance sustained by Ld CIT(A) out of miscellaneous expenditure disallowed by the AO. The revenue is contesting the relief granted by Ld CIT(A). 7. We heard the parties on this issue. The assessee had claimed deduction of miscellaneous expenditure amounting to Rs. 85.88 lakhs. Since the assessee did not furnish the details that were called for by the AO, he disallowed the entire amount of Rs. 85.88 lakhs. Before Ld CIT(A), the assessee furnished most of the details. Hence the Ld CIT(A) called for a remand report from the AO,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls, it is the settled proposition of law that the onus to prove the expenditure claim is placed upon the assessee. Hence, with regard to the amount of Rs. 7.30 lakhs, the assessee cannot be said to have completely discharged the responsibility. At the same time, we cannot fully disallow the said claim, since the expenditure was of routine nature type like travelling, conveyance etc. Under these set of facts, we are of the view that the disallowance may be restricted to 25% of the amount of Rs. 7.30 lakhs in order to take care of deficiencies and other disallowable nature of expenses. In our view, this will put this issue at rest. Accordingly, we modify the order passed by Ld CIT(A) on this issue and direct the AO to restrict the disallowanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cordance with the view taken by the Tribunal in the earlier years. Accordingly we confirm his order passed on this issue. 12. The next issue contested by the revenue relates to the disallowance made u/s 14A of the Act. The assessee had earned exempt dividend income of Rs. 2.38 crores. The AO worked out the disallowance at Rs. 29.38 lakhs by applying the provisions of Rule 8D of the IT Rules. The Ld CIT(A) noticed that the year under consideration being AY 2007-08, the provisions of Rule 8D will not apply as per the decision rendered by Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co.. He also noticed that the Tribunal had disallowed only to the extent of 5% of the dividend income u/s 14A of the Act in AY 2002-03. Accordingl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(A) on this issue. 18. The last issue contested by the revenue relates to the relief granted by Ld CIT(A) in respect of miscellaneous expenditure disallowed by AO. We have already dealt with this issue while considering the appeal filed by the assessee on the very same issue and we have confirmed the relief granted by Ld CIT(A) on this issue. 19. We shall now take up the appeal filed by the revenue for AY 2009-10. The solitary issue contested therein relates to the disallowance made u/s 14A of the Act. The assessee earned tax-free dividend income of Rs. 2.10 crores during the year under consideration. The Assessing Officer noticed that the assessee did not make any disallowance u/s 14A of the Act. Accordingly, the Assessing Officer comput....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on to the schedule of investments and submitted that the assessee did not make any fresh investments during the year under consideration. Out of the total investments of Rs. 2588.65 lacs, the assessee has invested a sum of Rs. 2586.00 lacs in its subsidiary company named M/s. Digital Securities Pvt. Ltd. Even that investment has been brought forward from the earlier year. The assessee had held investments in the form of units in mutual funds, and during the year under consideration, all of them have been liquidated. Accordingly, the Ld A.R submitted that the assessee did not incur any expenditure in respect of the investments, and hence no disallowance is called for u/s 14A of the Act. He also submitted that the own funds available with the....