TaxTMI 
TaxTMI 
2019 (2) TMI 1901
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the disallowance u/s 14A of the I.T Act 1961 to 2% of the exempt income on estimate basis, merely relying upon appeal orders in earlier assessment years without appreciation the fact in view of the decision of the Hon‟ble Bombay High Court in the case of Godrej & Boyce Ltd. the disallowance u/s 14A in respect of A.Y. 2008-09 and onwards are to be made following Rule 8D(2) of I.T. Rule 1962? 2. Whether on the facts and in circumstances of the case and in law, the ld. CIT(A) has erred in deleting the amount of disallowance u/s 14A r. w. Rule 8D to the amount of Rs. 19,51,247/- without appreciation the fact that assessee had failed to prove that the investment yielding exempt income were made from non-interest bearing funds ? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)has erred in deleting the adjustment made to Book Profit u/s 115JB of the Act on account of expenses relatable to exempt income u/ s 14A of the Act without appreciating the fact that the issue stands squarely covered by the decision of the Hon‟ble ITAT "D‟ bench in the case of ITO vs. RBK Share Broking Pvt. Ltd. - 37 taxman 128(2013) and the decision of the Hon&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A.Y. 2007-08 he had decided the issue in favour of the assessee. In the backdrop of his aforesaid observations the CIT(A) restricted the disallowance under Sec.14A to the extent the same was offered by the assessee at Rs. 1,81,485/- in its return of income. In so far the claim of the assessee towards additional depreciation was concerned, it was observed by the CIT(A) that the A.O had disallowed the assesses claim of additional depreciation of Rs. 1,36,32,835/- under Sec.32(1)(iia). The CIT(A) observed that the assessee had acquired and installed a new machinery in the period relevant to A.Y 2011-12, which during the said year was put to use by the assessee for a period of less than 180 days. As the new machinery was put to use by the assessee for a period of less than 180 days, therefore, as against its entitlement for claim of additional depreciation @ 20% the assessee had claimed the additional depreciation on the said machinery @10%. Further, the balance additional depreciation of 10% was claimed by the assessee during the year under consideration i.e A.Y 2012-13. It was observed by the CIT(A) that the A.O being of the view that the additional depreciation could only be claimed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y allowed the said claim of the assessee. In sum and substance, it was the claim of the ld. A.R that the entitlement of an assessee to claim additional depreciation was to be confined to the year in which it had acquired and installed the new machinery. 6. We have heard the authorized representative for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, the assessee during the year under consideration had offered a disallowance of Rs. 1,81,485/- under Sec. 14A in its return of income for the year under consideration. The A.O while framing the assessment had worked out the disallowance under Sec.14A r.w. Rule 8D at Rs. 21,32,732/-, and had after considering the amount of Rs. 1,81,485/- which was offered by the assessee in its return of income had made an addition/disallowance of the balance amount of Rs. 19,51,247/-. We find that it was the claim of the assessee before the CIT(A) that as its dividend income during the year under consideration amounted to Rs. 5,000/-, hence the disallowance under Sec. 14A be restricted to the said amount. However, the CIT(A) after necessary deliberations restricted the disallowance under S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5JB of the I.T Act. We thus uphold the order of the CIT(A) to the said extent.. The Ground of appeal No. 3 raised by the revenue is dismissed. 8. We shall now advert to the observations of the lower authorities as regards the entitlement of the assessee towards claim of additional depreciation under Sec. 32(iia) during the year under consideration. On a perusal of the records, it stands revealed that the assessee had acquired and installed a new machinery in the period relevant to the immediately preceding year i.e A.Y 2011-12 and the same was put to use for a period of less than 180 days during the said year. As the new machinery was put to use for a period of less than 180 days during the preceding year i.e A.Y 2011-12, therefore, the assessee had claimed additional depreciation @10% during the year under consideration and had claimed the balance additional depreciation @ 10% during the year under consideration i. A.Y 2012-13. The A.O being of the view that as per the provisions of Sec.32(1)(iia) of the I.T. Act the additional depreciation was to be allowed @ 20% of the actual cost of machinery of plant in the year in which it had been acquired and installed and could not be spi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days In that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) 1 or clause (iia), as the case may be: Provided also & Explanation 1 to Explanation 5** (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing or generation or generation and distribution o, power, a further sum equal to twenty per cent of the actual cost of such machinery or plant sha1jbè allowed as deduction under clause (ii)." Admittedly, the purpose of affording benefit to an assessee by way of additional depreciation under Sec.32(1)(iia) was backed with an intent to encourage industrialization i.e. either by setting up a new industrial unit or by expanding a new industrial unit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he facts and circumstances of case and in law the id. CIT(A) has erred in deleting the addition of Rs. 20,13,000/- made by A.O. u/s 14A of the Act, without appreciation the fact that assessee had failed to prove that the investment yielding exempt income were made from non-interest bearing funds? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)has erred in deleting the adjustment made to Book Profit u/s 115JB of the Act on account of expenses relatable to exempt income u/s. 14A of the Act without appreciating the fact that the issue stands squarely covered by the decision of the Hon‟ble ITAT "D‟ bench in the case of ITO Vs. RBK Share Broking Pvt. Ltd. - 37 taxman 128(20 13) and the decision of the Hon‟ble ITAT "F‟ Bench in the case of D.C.I.T. Cen. Cir. 18 & 19, Mumbai Vs. Viraj Profiles Ltd. (2015) 64 taxmann.com 52 (Mumbai - Trib.)/2016, 156 ITD 72 (Mumbai - Trib.) wherein it is clear that the provisions of section 14A r. w. r. 8D is applicable for computation of book profit u/s 115JB of the Act. 4. Whether on the facts and circumstances of the case the Ld CIT(A) has erred in holding that the additional depreciation is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee. 13. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee was persuaded to accept the same and allowed the appeal. 14. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. It was submitted by the ld. D.R that the grounds of appeal No. 1to 4 in the present case were the same as were there in the aforementioned appeal of the assessee for the immediately preceding year i.e. A.Y. 2012-13 viz. ITA No. 7290/Mum/2017. Insofar, the direction of the CIT(A) to the A.O to consider the second revised claim pertaining to 'bad debts' amounting to Rs. 544.20 lacs that was raised by the assessee in the course of the assessment proceedings was concerned, it was submitted by the ld. D.R that as the assessee had not raised any such claim in its return of income, hence, the CIT(A) had erred in directing the A.O to consider the said claim of the assessee. In support of his contention the ld. D.R relied on the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC). Apart therefrom, the ld. D.R also took s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ved therein remains the same as was raised before us by the revenue by way of ground of appeal No. 3 in its appeal for the immediately preceding year i.e A.Y. 2012-13 in ITA No. 7290/Mum/2017, thus our order passed while disposing of the ground of appeal No. 3 in the appeal of the assessee for A.Y. 201213 shall apply mutatis mutandis for disposing off the ground of appeal No. 3 for the year under consideration. The Ground of appeal No. 3 is dismissed in terms of our aforesaid observations. 18. As regards the ground of appeal No. 4 raised by the revenue before us, we find that as the issue involved has been adjudicated by us while disposing off the ground of appeal No. 4 in the appeal of the assessee for A.Y. 2012-13, thus our order passed while disposing of the ground of appeal No. 4 in the appeal of the assessee for A.Y. 201213 shall apply mutatis mutandis for disposing off the ground of appeal No. 4 for the year under consideration. The Ground of appeal No. 4 is dismissed in terms of our aforesaid observations. 19. We shall now advert to the contention of the revenue that the CIT(A) had erred in directing the A.O to consider the second revised claim pertaining to 'bad debt' amo....