Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 1210 - ITAT MUMBAIClaim of deprecation on intangible assets - Held that:- Notably in the past years, assessee had purchased Inter Trade Division of Mahindra & Mahindra Ltd. on a going concern basis and the excess of purchase consideration over the book value of the assets and liabilities taken over was considered as cost acquisition of various intangibles. The depreciation claimed on the acquisition of such intangibles was denied by the Tribunal vide its order for the assessment year 2000-01. Following the aforesaid precedent, in this year also the claim of depreciation of ₹ 8,92,714/- on the intangible asset is hereby rejected. Disallowance u/s 14A on clause (iii) of Rule 8D(2) of the Rules - Held that:- Notably, the assessee was found to have made investments, which yielded exempted dividend income to the tune of ₹ 1,42,73,000/-. The AO invoked the provisions of section 14A of the Act and disallowed a sum of ₹ 10,31,252/- being administrative expenses relatable to the earning of exempt income; and, such disallowance was worked out by the application of clause (iii) of Rule 8D(2). Ld. CIT(A) has also sustained the disallowance by noticing that assesse has not brought any material on record to show as to how the disallowance was not reasonable.Before us, the inability of the assessee to prove unreasonableness of the disallowance continues, as noticed by the Ld. CIT(A); and, therefore, we hereby affirm the disallowance of ₹ 10,51,252/- as above. Thus, on this aspect also the assessee fails. Liability towards post retirement medical claim for the employees - Held that:- Assessee fairly conceded that similar issue came before the Tribunal in the case of the group concern M/s. Mahindra &Mahindra Ltd. for assessment year 2007-08 similar liability has been held to be an unascertained liability which was not allowable as a deduction under section 37(1) of the Act. Following the aforesaid precedent, we hereby affirm the stand of the Lower Authorities in deciding the issue against the assessee. Thus, on this aspect also assessee fails. Addition on account of discrepancy in the AIR report - Held that:- CIT(A) has directed the AO to give further opportunity to the assessee and thereafter decide the issue afresh. We find no reason for any grievance on the part of the assessee as the Ld. CIT(A) has directed the AO to give opportunity to the assessee of being heard and thereafter pass an order afresh. The said direction to the AO is hereby affirmed and accordingly the said ground is disposed of. Grant of short credit for the TDS - Held that:- We find that the Ld. CIT(A) has directed the AO to grant credit for TDS under section 199 of the Act in accordance with law. We find no infirmity in the said direction of Ld. CIT(A), which is hereby affirmed. Addition under section 14A on the basis of clause (ii) of Rule 8D(2) - Held that:- Assessee has furnished the audited financial statement for the relevant period which clearly supports the inference drawn by the Ld. CIT(A). On the basis of the balance sheet as on 31/3/2009, it is quite clear that the loan funds in this year have substantially decreased than the preceding year. Further, the entire investment which yielded exempt income has been made during the year under consideration. Further the assessee has earned profit after tax of ₹ 4471.11 lacs and the share capital plus reserves and surplus of the assessee company stand at ₹ 13332.50 lacs. The aforesaid analysis of the financial statement clearly supports the inference of the Ld. CIT(A) that the ratio of judgment of Hon'ble Bombay High Court in the case of Reliance Utilities & Power Ltd.(2009 (1) TMI 4 - BOMBAY HIGH COURT ) is applicable. The interest free funds available with the assessee are sufficient to cover impugned investments and, therefore, it could be presumed that the investments have been made out of interest free funds. DR has not brought out any cogent reasoning or material which would enable us to take a view different than of the Ld. CIT(A). Therefore, we hereby affirm the order of Ld. CIT(A) on this aspect.
|