TaxTMI 
TaxTMI 
2026 (3) TMI 877
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....l) erred in upholding the disallowance of Rs. 15,59,529/- u/s 14A without appreciating that appellant had not incurred any direct or indirect expenses, nor any satisfaction to that effect was recorded by assessing office and, the appellant had already suo moto disallowed direct expenses in return of income. 2. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeal) erred in upholding disallowance of depreciation of Rs. 6,92,248/- on the office premises without appreciating that the office premises was part of the block of assets and used for business and therefore depreciation ought to have been allowed. 3. The Appellant craves the leave to add, amend, alter and/or delete any of the abov....
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....n appeal before this Tribunal. 4. Ground No. 1 raised by the assessee is in respect of the disallowance made u/s 14A of the Act. The Ld.AR submitted that the assessee had invested in equity-oriented mutual funds and equity instruments which yielded exempt income. While computing the disallowance under section 14A, the assessee had suo motu disallowed a sum of Rs.63,03,077/- being the portfolio management service (PMS) fees paid, along with STT of Rs.2,79,446/-. It was submitted that, apart from the aforesaid amounts, the assessee had not incurred any direct or indirect expenditure for earning the exempt income. 4.1. The Ld.AR further submitted that, apart from the portfolio management service (PMS) fees paid by the assessee, no oth....
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....he disallowance of expenditure relatable to exempt income must be computed strictly in accordance with the mechanism prescribed under Rule 8D(2). He, therefore, relied upon the orders of the authorities below. We have considered the submissions advanced by both sides in light of the records placed before this Tribunal. 5. It is noted that under the amended Rule 8D, introduced by the Finance Act, 2016 with effect from 01/04/2016, the disallowance under Rule 8D(2)(i) covers all direct and indirect expenditure incurred in relation to earning exempt income. In the present case, the assessee has offered a suo moto disallowance under the said limb. 5.1. However, admittedly, the assessee has not computed any disallowance under the second ....
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....eciation amounting to Rs.6,92,248/- on such immovable properties on the ground that the said properties were not used for the purposes of the assessee's business during the relevant year. 6.2. The Ld.AR submitted that the said immovable properties, being buildings, formed part of the block of assets. It was contended that once an asset forms part of a block, depreciation on the block cannot be denied merely because a particular asset within the block was not used for business purposes during the year. It was further submitted that once the immovable properties forming part of the block lose their individual identity, it is neither permissible nor practicable to segregate such assets from the block for the purpose of disallowing depreciat....
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....ovided under section 24 are permissible. On the other hand, where income is assessed under the head "Profits and Gains of Business or Profession," the assessee may claim deductions allowable under that head, including depreciation under section 32. Consequently, the same income stream cannot simultaneously be subjected to the provisions governing both heads for the purpose of claiming deductions. 7.2. In the present case, the assessee has offered the rental income under the head "Income from House Property" and claimed the statutory deduction under section 24. Once the income is so assessed, the claim of depreciation under section 32 in respect of the same property would ordinarily not be allowable. The scheme of the Act does not contemp....