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2015 (8) TMI 1287 - AT - Income TaxDisallowance u/s 14A - Held that:- The issue of calculation of disallowance u/s 14A is restored to the file of the AO to re-compute the disallowance u/s 14A by taking into consideration the principles laid down by the co-ordinate bench of this Tribunal in the case of REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA] wherein held that if there is any interest expenditure, which is directly relatable to any particular income or receipt, such interest expenditure is not to be considered under rule 8D(2)(ii). Also for bringing any interest expenditure, claimed by the assessee, under the ambit of rule 8D(2)(ii) it will have to be shown by the AO that the said interest is not directly attributable to any particular income or receipt - Decided in favour of assessee for statistical purposes. Disallowance of the expenditure towards renewal of a mining lease/afforestation charges - revenue v/s capital expenditure - Held that:- In view of the decision of the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. [1997 (4) TMI 5 - SUPREME Court] the allowance of this expenditure is to be staggered proportionately over the period of the lease and in proportion to the quantity of ore extracted from the said mine. In these circumstances, this issue is restored to the file of the AO for computation of the allowance of the afforestation charges as revenue expenditure in proportion to the quantum of iron ore extracted over the period of the lease. TDS u/s 195 - non deduction of tds on commission to the foreign agents outside India by applying the provisions - disallowance u/s 40(a)(ia) - Held that:- Expenditure has been incurred by the Assessee for the purpose of the business of the Assessee itself. However, in respect of the issue as to whether the Assessee was liable to deduct TDS u/s 195 and whether the disallowance was liable to be made u/s 40(a)(ia) of the Act for non-deduction of the TDS u/s 195(1) of the Act, it is noticed that the provisions of Sec. 195 has been amended by the introduction of Explanation-II to the said section by the Finance Act, 2012 with retrospective effect from 1.4.1962 whereby it is clarified that “the obligation to comply with sub-section (1) and to make deduction thereunder applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident person has (i) a residence or place of business or business connection in India; or (ii) any other presence in any manner whatsoever in India.” In view of the introduction of Explanation - II to Sec. 195 of the Act, as the Assessee has not deducted TDS u/s 195, the disallowance made by the AO by invoking the provisions of Sec. 40(a)(ia) of the Act would have to be restored and we do so. - Decided in favour of revenue Claim of depreciation @ 60% allowed on the UPS at par with the depreciation rate on computers. See assessee'swn case [2013 (4) TMI 814 - ITAT PANAJI] Disallowance of expenditure of interest paid on loans taken at interest and advanced to the sister concerns without charging any interest - Held that:- As it is noticed that the Assessee has sufficient non-interest bearing funds available with it, the disallowance as made by the AO, and as deleted by the ld. CIT(A) stands confirmed. Addition on account of notional loss on exchange variation - Held that:- This issue is restored to the file of the AO for re-adjudication in line with the decision of the co-ordinate bench of this Tribunal in the case of M/s. Majestic Exports [2015 (7) TMI 936 - ITAT CHENNAI ] wherein held held that Loss suffered on account of forex derivative contracts (Exotic Cross Currency Option Contracts) cannot be treated as speculative loss to the extent that the derivative transactions are not more than the total export turnover of the assessee. If the derivative transaction is in excess of export turnover, the loss in respect of that portion of excess transactions has to be considered as speculative loss because the excess derivative transaction has no proximity with export turnover. Addition on account of repairs and maintenance of old vessels which were in the nature of current repairs - CIT(A) deleted the addition - Held that:- Nature of the expenditure is only for the purpose of maintaining the vessels sea-worthy and in accordance with the requirements of the Maritime Regulatory Authority and there is no increase in the capacity . Additions correctly delted Disallowance of additional depreciation deleted
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