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2012 (10) TMI 175 - AT - Income TaxDepreciation on leased assets - Finance lease vs Operating lease - Held that:- As decided in IndusInd Bank Limited Versus ACIT (2012 (3) TMI 212 - ITAT MUMBAI) it is a simple case of advancing of loan by the assessee to the lessee and the so called lease agreement, in the facts and circumstances of the present case, has been attempted to be used as a device to reduce tax liability of the assessee - the sole purpose of enabling the assessee to artificially fulfill the twin requirements of ownership and user of the asset so as to claim depreciation, to which it was not otherwise entitled as per law and thereby reduce its income in a mala fide manner - against assessee. Depreciation on UPS - as electrical installation OR an integral part of computer - depreciation @ 25% OR 60% - Held that:- It cannot be said that UPS are only for computers whereas printers do not have any other use other than with the computer. However it is for the assessee to establish that the UPS have been purchased as part of the computer systems. Therefore , in the interest of justice this issue is restored back to the files of the AO. Treatment of software license - as intangible assets OR an integral part of computer - Held that:- the AO has not gone into details of the software purchased by the assessee. The assessee has exhibited the copy of invoice for the purchase of software with each and every item mentioned in the invoice vis-a-vis the business of the assessee which was ignored by AO - this issue is restored back to the files of the AO - in favour of assessee for statistical purposes. Treatment of creditors outstanding more than 3 years as income - Held that:- as the assessee has taken the benefit of claiming these expenses in F.Y. 1999-2000 and now that the liability has been found not to be discharged. No reason to interfere with the findings of the CIT(A) and addition of Rs. 3,47,081/- is confirmed - against assessee. Disallowance of bad debts written off - Held that:- Sec. 36(1)(vii) has to be r.w.s 36(2). Section 36(2)(i) provides that “ no such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money lending which is carried on by the assessee”. Reading both these sections together, we find that the assessee has not brought any material evidence on record to substantiate its claim in the light of the provisions of Sec. 36(2)(i). In the interest of justice it is fit to restore this issue back to the file of AO - in favour of assessee for statistical purposes. Disallowance of expenses incurred on commission and brokerage - Held that:- the assessee was not even given an opportunity to reconcile the difference in the amount of confirmation received from the parties which has resulted into an addition of Rs. 38,88,596/-. Also that the CIT(A) has simply disallowed in respect of parties from whom confirmations have not been received and Rs. 65,93,011/- in respect of parties whose PA Nos were not available. As this issue needs further verification restore this issue back to the files of AO - in favour of assessee for statistical purposes. Disallowance u/s. 14A - Held that:- It is not disputed that the investments are made in earlier years. The assessee has also not claimed any income exempt from tax as the investments pertains to earlier year, thus no reason for making any disallowance during the year under consideration - in favour of assessee. Renovation expenditure & Architect fees - Revenue expenditure OR capital expenditure - Held that:- all the items of expenses give a benefits which are of enduring in nature - expenses cannot be termed as “current repairs”. - against assessee. Deduction u/s. 80G - ineligible donation given to M/s. K.C.Mahindra Trust - Held that:- It appears that the AO has not considered the certificate issued by DIT (Exem) Mumbai & rejected the claim because the receipt issued to donor does not bear the number and date of the order of the DIT (Exemption), thus restore this issue back to the file of AO to reconsider certificates submitted by assessee - in favour of assessee for statistical purposes. Penalty u/s 271(1)(c)- Held that:- The penalty has been levied on quantum additions made in the assessment proceedings for assessment year 2003-04 and also to the enhancement made by the Ld. CIT(A) during the course of appellate proceedings and as the quantum appeal has been restored back to the file of AO, accordingly this issue is also to be restored back to the file of AO - in favour of assessee for statistical purposes.
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