TaxTMI 
TaxTMI 
2026 (8) TMI 471
X X X X Extracts X X X X
X X X X Extracts X X X X
....between 1/1/2009 to 30/9/2009 relevant to Assessment Year 2009-10 & 2010-11 claimed at higher rate of 50% as per Appendix I to Rule 5 instead of 15% by following his predecessor's order for Assessment Year 2012-13 and ignoring the arguments and Appeal Notes furnished before him. (b) That the Ld. CIT(A) has wrongly ignored the arguments of appellant for allowing the depreciation @50% instead of 15% in respect of "Block of Commercial Vehicles" as per provisions of section 43(6)(c)(ii) of Income Tax Act, 1961 for AY 2009-10 which was allowed by Ld. CIT(A) in Assessment Year 2009-10. (c) That the Ld. CIT(A) has failed to consider and allow the correct depreciation on Commercial Vehicles for additions made in Assessment Year 2009-10 @50% & for Assessment Year 2010-11 @15% determined by the AO proportionately 15% of 50% claimed by applicant without determining the w.d.v as per section 43(6)(c)(ii) of Income Tax Act, but simply followed the order of his predecessor for Assessment Year 2012-13. 2. That the Ld. CIT(A) has wrongly confirmed the "provision for warranty" claimed at Rs. 2.07 crores, which is based on principle of mercantile system of accounting, as "C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irmed the disallowance of depreciation on "Commercial Vehicles" purchased between 1/1/2009 to 30/9/2009 relevant to Assessment Year 2009-10 & 2010-11 claimed at higher rate of 50% as per Appendix I to Rule 5 instead of 15% by following his predecessor's order for Assessment Year 2012-13 and ignoring the arguments and Appeal Notes furnished before him. (b) That the Ld. CIT(A) has wrongly ignored the arguments of appellant for allowing the depreciation @50% instead of 15% in respect of "Block of Commercial Vehicles" as per provisions of section 43(6)(c)(ii) of Income Tax Act, 1961 for AY 2009-10 which was allowed by Ld. CIT(A) in Assessment Year 2009-10. (c) That the Ld. CIT(A) has failed to consider and allow the correct depreciation on Commercial Vehicles for additions made in Assessment Year 2009-10 @50% & for Assessment Year 2010- 11 @15% determined by the AO proportionately 15% of 50% claimed by applicant without determining the w.d.v as per section 43(6)(c)(ii) of Income Tax Act, but simply followed the order of his predecessor for Assessment Year 2012-13. 2. That the Ld. CIT(A) has wrongly confirmed the "provision for warranty" claimed at Rs. 2.09 cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvation considering the chart given above, considering the definition of light motor vehicle under the Motor Vehicle Act and considering the definition of Commercial Vehicle under the Income Tax Depreciation Schedule, we hold that vehicles bought by assessee between 1.1.2009 to 1.190.2009 being eligible for depreciation @50%. Accordingly, ground no. 5 raised by the revenue is dismissed...." Consolidated order for AY 2010-11 to AY 2013-14 11. Ground No. 3 relating to disallowance of Rs. 87,19,240/- on account of Higher Depreciation on Commercial vehicles is concerned, AO noted that as per Motor Vehicle Act the vehicles purchased by the assessee do not satisfy the conditions to be called 'commercial vehicles' eligible for 50% depreciation, as claimed. He further noted that Assessee has not been able to furnish any evidence in support of its claim, hence, 15% depreciation on non-commercial vehicles is applicable. Whether a vehicle is commercial or non- commercial is decided by the RTO at the time of registration. Ld. CIT(A) confirmed the addition made by the AO. During the hearing, Ld. AR submitted and drew our attention towards page no. 332 of the paper book which i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2.90 crores the assessee had already disallowed a sum of Rs. 1.90 crores in AY 2008-09 in the computation of income thereby drawing the attention of the Ld. CIT(A) that there is double addition made by the AO to the extent of Rs. 1.90 crores. The assessee also submitted the basis of arriving at the provision on a scientific manner which is inconsonance with the principles and parameters laid down by the Hon'ble Supreme Court in the case of Rotork Controls referred (supra), the Ld. CIT(A) appreciated the same and granted relief to the assessee. We find that the said provision is made in tune with the matching principle of accountancy wherein, the sale reported by the assessee and the provision of warranty thereon are inter related with each other and that effectively the provisions made for warranty becomes inextricably link with the sales reported by the assessee. In fact considering the nature of industry the assessee is involved and also considering the consistent practice of assessee fasten with liability on account of warranty from the customers in accordance with the warranty clause thereon; and also considering the fact that the provision for warranty thereon being given on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en decided in favour of the assessee in Assessee's ITA NO. 2619/DEL/2015 (AY 2010-11). Following the consistent view, as aforesaid, these grounds are also allowed in favour of the assessee." 6. Following the consistent views, as aforesaid, the ground no. 2 raised in both the appeals relating to assessment years 2014-15 & 2015-16 is allowed in favour of the assessee in the aforesaid manner. 7. Apropos issue relating to disallowance u/s. 35(2AB) raised in both the appeals raised vide Ground no. 3 relevant to assessment year 2014-15 & 2015-16 is concerned, it was the contention of the Ld. AR that Ld. CIT(A) wrongly confirmed the disallowance of deduction claimed u/s. 35(2AB) at Rs. 11,30,310/- being the difference of amount approved by DSIR and actual expenditure incurred by the applicant company at Rs. 29,79,51,310/- by ignoring the arguments of applicant and provision of section 35(2AB) which allows the deduction two times of the expenditure so incurred. We note that this issue is covered by the Tribunal's order dated 29.8.2025 in assessee's own case decided in consolidated order of AY 2010-11 to 2013-14 wherein, it has been held as under: "19. Issue relating to disal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngly, this ground of appeal in both the appeals is remitted back to the AO with the aforesaid directions. We hold and direct accordingly. 8. As regards issue relating to disallowance u/s. 14A raised in both the appeals vide Ground no. 4 relevant to assessment year 2014-15 & 2015-16 is concerned for investment in JV and investment yielding dividend and investment in tax free bonds are concerned. We note that the AO made the addition u/r 8D(2)(ii) of Rs. 1,40,43,742/- by observing that the assessee has earned exempt income of Rs. 9,75,64,893/- which is not includible in the total income for tax purpose. It was further observed by the AO that the assessee has himself added back and amount of Rs. 12,64,297/- as disallowance u/s. 14A in the computation of total income. The assessee has borrowed funds on which it paid interest of Rs. 3,26,24,666/-. We observed that there is no exempt income from investment in JV and hence, Section 14A is not attracted and disallowance cannot be made in anticipation of income arising in the future and disallowance u/s. 14A cannot be attracted in the absence of exempt income in the hands of the assessee. Even otherwise, this issue is covered by the deci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....resaid, the addition in dispute made u/r 8D(2)(ii) is hereby deleted and accordingly, this ground is allowed in both the appeals. 8.2 As regards addition made of Rs. 4,36,77,443/- u/r 8D(2)(iii) relating to investment yielding dividend and investment in tax free bonds is concerned, it is noted that the assessee earned Rs. 7,88,97,606/- as interest on tax free bonds and dividend of Rs. 1,86,67,287/- from preference shares. The dividend yielding preference shares as well as tax free bonds were acquired in AY 2013-14 and in current year AY 2014-15. Ld. AR drew our attention towards the page no. 8 of the Paper Book which is a copy of balance sheet as on 31.3.2014 for the relevant period, showing that assessee has Reserves and Surplus of Rs. 17,638,949,628/- whereas total investment in shares was Rs. 124.09 in AY 2013-14 and AY 2014-15 Rs. 425.91 crores respectively, thus the amount invested by the assessee is significantly less than increase in the reserves and surplus during both the years. Thus, the borrowed funds may have been used for making an investment in the absence of separate books of account is incorrect. Even otherwise, it is settled law that where both interest free and....