TaxTMI 
TaxTMI 
2018 (10) TMI 1751
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....disallowance of expenses relatable to exempt income by the AO and confirmed by CIT(A) by invoking the provisions of section 14A of the Act read with Rule 8D of the IT Rules of 1962. For this assessee has raised the identically worded grounds and the facts and circumstances are also exactly identical in both the years. The ground as raised in ITA No. 5395/Mum/2013 for AY 2009-10 reads as under: - "1. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of the Assistant Commissioner of Income Tax 10(1). Mumbai ("the AO") in disallowing a sum of Rs. 19,74,351/- u/s. 14A of the Act being the disallowance u/s 14A of the Act r.w.r SD of the Rules. 2. We further erred in applying rule SI) of the Rules automatically without considering the facts of the Appellant and without recording his dissatisfaction on the amount computed and offered for disallowance by the Appellant. 3. The Appellant prays that the disallowance u/s 14A of Rs. 19,74,351/- be deleted. 4. Without prejudice. the Appellant prays that the disallowance be restricted to Rs. 3,98,152/-." 3. Brief facts are relating to this issue are that the ass....
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....enses relatable to exempt income. Simply the AO has applied Rule 8D(2)(iii) and by applying the said formula he has computed the disallowance. According to us, this issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT [2018] 402 ITR 640 (SC), held as under: - ""41. Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also make it clear that before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance under Section 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting the said apportionment. In that eventuality, it will have to record its satisfaction to this effect. Further, while recording such a satisfaction, nature of loan taken by the assessee for purchasing the shares/ making the investment in shares is to be examined by the AO." 7. We are of the view that satisfaction is mandatory in view of the above decision of Hon'ble Supreme Court in the case of Maxopp Investment Ltd and in the present case, th....
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.... on computer accessories & printers." 12. Brief facts are that during the year under consideration, the assessee purchase scanner machine, printers and claimed depreciation on printers and scanners at the rate of 60%. According to AO, depreciation on printers and scanners was allowable at the rate of 15% as against 60% claimed by assessee. But CIT(A) allowed the claim of depreciation at the rate of 60% by observing as under: - "Since in various decisions it had been held that the computer accessories and other items are integral part of computer system and hence allowable depreciation is @ 60%. Following the above decisions, the AO is directed to allow depreciation @ 60% on printers." Aggrieved, Revenue is in appeal before Tribunal. 13. At the outset, the learned Counsel for the assessee filed copies of Tribunals order in assessee's own case in ITA No. 1711/Mum/2011 for AY 2007-08, wherein Tribunal vide order dated 22.07.2015 has allowed the claim of the assessee by observing in Para 5 as under: - "5. Before us, the Ld. Departmental Representative had not raised any cogent reasoning to negate the finding of CIT(A) that the items picked up by the ....
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.... the year under consideration are identical to that of AY 2007-08. During the course of business, the business receipts of the appellant were available for short period of time for deposing the same in fixed deposits and mutual funds. Thus the interest income has been earned on deployment of business receipts. The Hon'ble Bombay High Court in the case of CIT vs. Lok Holdings 308 ITR 356 held that where business receipts are used for earning interest income, the interest income was assessable under the head business income. In the case under considerations the business receipts were not surplus funds but were not immediately required for the purpose of business activities. Thus these business receipts were available to the appellant for a very short period during the year which were invested in FDs and mutual funds. Following the Bombay High Court decision in the case of Lok Holding and appeal order of AY 2007-08, the AO is directed to assess the interest income under the head profits and gains of business or profession. This ground of appeal is therefore, allowed." 17. We find that the Tribunal in ITA No. 1711/Mum/2011 for AY 200708 vide order dated 22.07.2015 considered this is....