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2010 (10) TMI 214 - AT - Income TaxSection 14A – Disallowance of interest expenditure - In the case of CIT vs. Hero Cycles Ltd. (2009 -TMI - 35238 - PUNJAB AND HARYANA HIGH COURT), a finding was recorded by the Tribunal that the investment in shares and funds was made by the assessee out of the dividend proceeds and not out of borrowed funds and in view of this finding of fact, it was held by the Hon’ble Punjab & Haryana High Court that the disallowance u/s 14A was not sustainable – As per the decision of the Hon’ble Punjab & Haryana High Court in the case of Hero Cycles Ltd. and having regard to the facts of the case, hold that the disallowance made by the A.O. out of interest expenses u/s 14A and confirmed by the ld. CIT(A) is not sustainable disallowance out of common administrative expenses - As held by the Hon’ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. (2010 - TMI - 78448 - BOMBAY HIGH COURT), Rule 8D of the Income Tax Rules 1962 is applicable only prospectively i.e. from A.Y. 2008 by adopting some reasonable method – Hence disallowance made by the A.O. has been sustained by the ld. CIT(A) to the extent of 5% of the total exempt income earned by the assessee - The assessee’s appeal are accordingly allowed Disallowance pf amortization of premium paid by the assessee for leasehold land – Which is squarely covered against the assessee by the orders of the Tribunal in assessee’s own case for earlier years i.e. A.Y. 2000-01 to 2003-04 - Dismiss the assessee’s appeal Depreciation on the opening written down value of the block of assets - The appellate order for immediately preceding assessment year is also squarely covered against the assessee by the decision of the Tribunal in assessee’s won case for A.Y. 2003-04 rendered vide its order dated 30.9.2008 in ITA No. 4197/Mum/06 wherein a similar claim of the assessee has been disallowed by the Tribunal.
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