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2012 (9) TMI 445 - HC - Income TaxDisallowance of expenditure on VRS u/s 35DDA - non compliance with Rule 2BA - ITAT allowed the deduction - Held that:- Rule 2BA is in the form of guidelines for the purpose of Section 10(10C), which relates to taxation of income/amount received by an employee under VRS scheme. The said Rule does not deal with the expenditure incurred by the employer when the assessee makes payment under the VRS scheme formulated by them. The treatment of expenditure or outgoing of the employer has to be dealt with under Section 35DDA and the prescribed rules, if applicable. Rule 2BA, which is applicable to the recipient i.e. the employee, cannot be applied - in favour of assessee. Disallowance of Depreciation on UPS - ITAT allowed @ 60% treating the same as computers - Held that:- As decided in CIT Vs. BSES Yamuna Power Ltd [2010 (8) TMI 58 - DELHI HIGH COURT] that computer accessories and peripherals form an integral part of a computer system and, therefore, depreciation has to be allowed at the rate of 60% - as that the higher depreciation was not only allowed in respect of UPS but also in respect of printers, switches etc. - in favour of assessee. Disallowance of deduction of 1/5th of the expenses relating to legal and professional expenses relating to closure of the Daruhera unit - ITAT allowed it - Held that:- As decided in C.I.T v. D.C.M [2009 (1) TMI 2 - HIGH COURT DELHI] the expenditure incurred on payment of retrenchment compensation and interest on money borrowed for payment of retrenchment compensation on closure of one of the units, amongst other businesses, of the assessee-company was revenue expenditure. It also held that closure of one unit did not amount to closure of business as it was not a separate and distinct business - in favour of assessee.
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