TaxTMI 
TaxTMI 
2026 (9) TMI 991
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....nafter referred to as 'ld. AO'). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. . As some of the issues involved in all these appeals are identical in nature, they were heard together and disposed of by this common order for the sake of convenience. ITA No. 3919/Del/2013 - Asst Year 2009-10 - Assessee Appeal 2. The Ground Nos. 1,7 & 8 raised by the assessee are general in nature. 3. The Ground No. 2 raised by the assessee is challenging the confirmation of disallowance under section 14A of the Act. In this regard, we find that the assessee had not earned any exempt income during the year under consideration and hence the provisions of section 14A of the Act per se cannot be pressed into service. Reliance in this regard is placed on the decision of Hon'ble Jurisdictional Delhi High Court in the case of PCIT vs Era Infrastructure India Ltd reported in 448 ITR 674 (Del). Accordingly, the Ground No. 2 raised by the assessee is allowed. 4. The Ground No. 3 raised by the assessee is challenging the confirmation of action of the learned AO by the learned CITA in treating ....
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....he assessee claimed depreciation at the rate of 60 percent on additions made to UPS and on the opening WDV of UPS in the income tax depreciation schedule. The Learned AO observed that UPS is to be treated as part of plant and machinery and would be eligible for depreciation only at the rate of 15 percent as against the claim of 60 percent made by the assessee. This action of the Learned AO was upheld by the Learned CITA . We find that the issue in dispute is no longer res integra in view of the decision of Hon'ble Jurisdictional Delhi High Court in the case of CIT vs BSES Yamuna Power Limited in ITA 1267/2010 dated 31- 08-2010 wherein it was held that computer accessories and peripherals such as printers, scanners and servers etcetera form an integral part of the computer system and that the same cannot be used without the computer. Hence, they should be construed as part of the computer system and would be entitled for higher rate of depreciation at the rate of 60 percent. Respectfully following the same, the Ground No. 4 raised by the assessee is allowed. 6. The Ground No. 5 raised by the assessee is challenging the confirmation of action of the learned AO in disallowing the d....
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....pectfully following the same, the issue is restored to the file of Learned AO for the year under consideration also and accordingly Ground No. 5 raised by the assessee is allowed for statistical purposes. 7. The Ground No. 6 raised by the assessee is challenging the initiation of penalty proceedings which under Section 271(1)(c ) of the Act which would be premature for adjudication at this stage and hence dismissed. 8. In the result, the appeal of the assessee is partly allowed for statistical purposes. ITA No. 386/Del/2017 - Asst Year 2011-12 - Assessee Appeal ITA No. 443/Del/2017 - Asst Year 2011-12 - Revenue Appeal 9. The Ground No.1 raised by the assessee and Ground Nos. 1 to 4 raised by the revenue are in connection with the disallowance made under section 14A of the Act. 9.1. We have heard the rival submissions and perused the materials on record. It is not in dispute that the assessee ) Earned dividend income of Rs. 11,35,801 and claimed the same as exempt income in the return of income. The assessee company did not make any suo-moto disallowance of expenses under section 14A of the Act for the purpose of earning such exempt income. Accordingly, the Learned....
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....directors' remuneration on the basis of turnover between eligible units and non-eligible units. Based on this allocation on the basis of turnover, the learned AO sought to shift expenditure to the tune of Rs 50,57,000 from taxable unit to eligible unit. Further, with regard to directors' commission of Rs 2,50,00,000 which was worked out at 2.5 percent of the net profit of the company, the learned AO proceeded to allocate the same between the eligible unit and non-eligible unit in the ratio of profits of the respective units and accordingly sought to shift a sum of Rs 1,04,27,000 from non-eligible unit to eligible unit. Accordingly, the total sum of Rs 1,54,84,000 (50,57,000+1,04,27,000) was disallowed by the learned AO while computing the deduction under section 80 IC of the Act. The Learned CITA appreciated in principle the allocation mechanism adopted by the learned AO for all the expenses except in respect of Directors' commission, which was also allocated by the learned CITA on the basis of turnover instead of on profits of the respective units. Aggrieved by this order, both the assessee as well as the revenue are in appeal before us. 10.2. We find that this issue has alread....
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.... without deduction of tax at source. The Learned AO during the course of assessment proceedings directed the assessee to furnish its justification of allowability of the same in terms of CBDT Notification No.56 /2012 dated 31-12-2012. The Learned AO by placing reliance on the CBDT Notification dated 31-12-2012 disallowed the Bank Guarantee Commission of Rs. 22,15,736 under section 40(a)(ia) of the Act for payment made without deduction of tax at source. The learned AO also noted that the assessee had failed to furnish the details of bank guarantee commission in the assessment proceedings. It was contended that the provisions of section 194H as stated by the learned AO would not be applicable at all in the instant case in respect of bank guarantee fees paid to bank by the assessee. There is no element of agency within the meaning of section 194H of the Act in the said transaction. It was submitted that when the bank issues the bank guarantee on behalf of the assessee, all it does is to accept the commitment of making payment of a specified amount on demand to the beneficiary stated in the bank guarantee agreement and it is in consideration of this commitment, the bank charges a fee ....
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....14 containing the details of capital work in progress and advances to capital suppliers, that such investments were made by the assessee out of borrowed funds. Therefore the learned AO took the average of opening and closing balance of capital work in progress (CWIP) and arrived at the average of Rs 793.54 lacs thereon. The learned AO applied interest rate of 10% on an adhoc basis on the average of aforesaid CWIP and held that the interest of Rs 79,35,000 (793.54 lacs *10%) ought to have been capitalized by the assessee and consequentially disallowed the same in the assessment. The Learned CITA found that the assessee is having sufficient interest free funds of Rs 240 crores and hence the presumption would go in favour of the assessee that the investment in CWIP had been made out of own funds and not out of borrowed funds of the assessee. We find that this proposition of law laid down by the learned CITA had been fortified by the decision of South Indian Bank Ltd vs CIT reported in 130 taxmann.com 178 (SC). Hence we do not find any infirmity in the order of the learned CITA deleting the disallowance of interest of Rs 79,35,000. Accordingly, the Ground No. 9 raised by the revenue is....