TMI Blog2021 (9) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has not given any basis for the suo moto disallowance of ₹ 10 lacs which amounts to recording the satisfaction by the AO. When the facts for the two assessment years are entirely different then the reasoning recorded by the AO for the year under consideration cannot be compared for the AY 2010-11. Hence, we do not find any substance in the contention of the ld. AR of the assessee that addition made by the AO is liable to be deleted. Since, the AO has computed the disallowance by applying the formula under Rule 8D which is 0.5% of the average investment then we do not find any fault in the computation of disallowance made by the AO. As we have already discussed that there is a regular transaction of purchase and sale of shares a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assistance and services to the industrial and service concerns for their new projects. The assessee has claimed depreciation of ₹ 1,09,18,928/- on lease out plant and machinery. The AO disallowed the claim of the depreciation by following the earlier orders in the assessee s own case. The assessee challenged the action before the CIT(A) but could not succeed. 3. We have heard the Ld. AR as well as the Ld. DR and consider the relevant material on record. The Ld. AR has pointed out that for the AY 2010-11 this Tribunal has decided the issue in favour of the assessee and allowed the claim of depreciation. He has further submitted that the Tribunal has taken a consistent view since AY 1999-2000 till 2010-11. 4. The Ld. DR has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the decision of the Tribunal (supra), we do not find any justification or cause for issuing direction by the Ld. CIT(A) to the Assessing Officer for verification of the depreciation claimed by the lessees, before allowing depreciation to the assessee on such leased asset. Accordingly, this ground of the appeal of the assessee is allowed. 5. Accordingly, to maintain the rule of consistency, we follow the earlier order of this Tribunal and allow the claim of depreciation. The addition made by the AO on this account is deleted. 6. Ground No. 2 is regarding disallowance made by the AO u/s 14A read with Rule 8D. The Ld. AR of the assessee has submitted that an identical issue has been considered by this Tribunal in assessee s ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and regular business income. The decision of Hon ble Supreme Court in the case of Maxopp Investment Vs. CIT (supra) is relevant in respect of disallowance on account of interest expenses but the said decision cannot take away the provisions of Rule 8D(2) towards indirect administrative expenses. When the assessee has made a huge investment in the shares and securities and there is a regular transactions of sale and purchase then it cannot be accepted that the assessee has not incurred any expenditure for earning the dividend income. The AO has not made any addition on account of interest expenditure but he has computed the disallowance being .5% of average investment which is indirect administrative expenses. Therefore, an adhoc disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 31.03.2010 and as on 31.03.2012. The assessee has made the suo moto disallowance of ₹ 10 lacs for the AY 2010-11 and same amount of disallowance was also adopted by the assessee for the year under consideration. Thus, except for the disallowance of identical amount for the AY 2010-11 there is no other basis for taking this amount of ₹ 10 lacs as suo moto disallowance for the year under consideration. The AO has accepted the claim that the investments were made out of the interest free funds available with the assessee but he has made the disallowance only on account of administrative expenses. Once there is a regular transaction of purchase and sale of shares by the assessee and the decision of making the investment as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of ₹ 10 lacs which amounts to recording the satisfaction by the AO. When the facts for the two assessment years are entirely different then the reasoning recorded by the AO for the year under consideration cannot be compared for the AY 2010-11. Hence, we do not find any substance in the contention of the ld. AR of the assessee that addition made by the AO is liable to be deleted. Since, the AO has computed the disallowance by applying the formula under Rule 8D which is 0.5% of the average investment then we do not find any fault in the computation of disallowance made by the AO. As we have already discussed that there is a regular transaction of purchase and sale of shares and securities by the assessee, therefore, the administr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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