TaxTMI 
TaxTMI 
2019 (9) TMI 298
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....on lease from Hewlett Packard Financial Services India Pvt. Ltd. (HPFS). For this assessee has raised the following ground No. 1: - "The learned Commissioner of Income-tax (Appeals) erred in confirming the disallowance of depreciation of Rs. 6,00,00,000/- on assets taken on lease from Hewlett Packard Financial Services Pvt. Ltd. (HPFS). a) The learned Commissioner of Income-tax (Appeals) ["the CIT(A)"] erred in confirming the action of the Assessing Officer who had disallowed the depreciation of Rs. 6,00,00,000/- on the servers purchased in Assessment Year 2011-12 from HPFS under Finance Lease Scheme on protective basis. The learned Commissioner of Income-tax (Appeals) failed to appreciate the fact that the appellant had purchased the assets under Finance Lease Scheme and is therefore the owner of the assets. Your appellant had also paid insurance premium as the owner of the assets and therefore had rightly claimed depreciation of Rs. 6,00,00,000/- u/s.32 on the said assets. The Assessing Officer therefore be directed to allow the same. b) Without prejudice to the above, the Commissioner of Income-tax (Appeals) failed to consider the alternate ground of a....
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....d 2011-12 as well. The appellant also invited my attention in the case of Hewlett Packard India Sales Pvt. Ltd. Vs. DCIT [ITA No. 683/Rang/2010]. 7.2 I have carefully considered the rival submissions and facts of the ease. The appellant assessee has not disputed the fact that MIs Hewlett Packard India Sales Pvt. Ltd has not claimed the depreciation on these computers and had failed to justify the reason to claimed the depreciation b two entities on the same asset. The case law cited by the AR will not help the assessee once the deprecation has claimed by the lesser as owner of the computers in question. In view of the same I did not find any reason to interfere in the finding of the AO and hence, depreciation cannot be allowed on these computers, therefore Ground No.2 is dismissed." Aggrieved, now assessee is in appeal before Tribunal. 6. We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the assessee filed complete chart in regard to claim of depreciation on leased assets and in AY 2011-12 depreciation was allowed by the AO and no action whatsoever under the provisions of Act was taken thereafter. The learned Counsel....
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....essee company is the owner of the server and they have to take out insurance policy and paid the insurance premium to cover various risks attach to it and assessee company is the only user of the server. In term of the above facts, the assessee claim depreciation on the WDV at the rate applicable to fixed assets. It was claimed that the assessee company has not claimed any amount of revenue expenditure except interest paid to HPFS amounting to Rs. 1,03,70,798/- and this was claimed under the head of finance cost. We noted that the AO has disallowed depreciation of Rs. 6 crores on the ground that HPFS has claimed depreciation on the said asset not only in this year but in subsequent years. The assessee before us explained that the Income Tax Department for AY 2009-10 has already disallowed the claim of depreciation in the hands of the HPFS. We noted that in the very first year i.e. AY 2011-12, the depreciation has already allowed the claim of depreciation. We noted that in the income tax code, there is a provision/ concept of block of asset and once any asset enters into block asset and claim of depreciation in very first year is allowed, in subsequent year the deprecation cannot be....
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....Bombay High Court in Godrej & Boyce and the method adopted by the assessee is not valid method." 10. Briefly stated facts are that the assessee company has earned exempt income in the form of dividend and interest on interest fee bonds deposit amounting to Rs. 18.86 crores on units of mutual funds and tax free bonds and claim the same as exempt under section 10(34) and 10(35) of the Act. The assessee has made suo moto disallowance of expenses relatable to exempt income under section 14A read with Rule 8D of the Rules amounting to Rs. 40,13,000/-. The AO noted that the said suo moto disallowance made by assessee, is not as per Rule 8D of the IT Rules and thereby, he invoked the provisions of section 14A read with Rule 8D of the Rules and made disallowance under Rule 8D(2)(i) at Rs. 18,68,443/- and under Rule 8D(2)(iii) being half percent of average value of investment at Rs. 7,40,54,295/-. Thereby, the AO worked out the disallowance of expenses at Rs. 7,59,22,738/-. The AO after allowing the suo moto disallowance made by the assessee, made balance disallowance at Rs. 7,19,09,738/-. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) restricted the disallowance at R....