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2014 (7) TMI 422 - AT - Income TaxClaim of depreciation on leased assets – Held that:- The decision in M/s ICDS. LTD. Versus COMMISSIONER OF INCOME TAX MYSORE & ANR [2013 (1) TMI 344 - SUPREME COURT] followed - the assessee is entitled to claim the depreciation on sale and leased back assets - CIT(A) in allowing the claim of depreciation is upheld – Decided against Revenue. Interest on borrowed funds – Expenses u/s 14A of the Act - Held that:- The proviso to section 14A of the Act prohibits all situations where the officer is otherwise entitled or required to revise an assessment which includes order of enhancement issued by the CIT(A) in exercise of his powers – the bar in the proviso to section 14A is applicable in relation to the exercise of appellate power by the CIT(A) also - CIT(A) is not within his powers to direct the AO to allocate the expenditure u/s 14A, on account of interest on borrowed funds against the tax free dividend income earned by the assessee - CIT(A) has completely ignored the contentions of the assessee against the disallowance of interest expenditure made by the AO as the CIT(A) has altogether proceeded to decide the issue in the light of section 14A, which already held as not legally tenable in view of the proviso to section 14A – thus, the matter is to be remitted back to the CIT(A) for re-adjudication – Decided in favour of Assessee. Deduction of expenses as interest paid on late payment of dividend tax u/s 115(O) of the Act – Held that:- The interest paid u/s 115(P) of the Act is to re-compensate the Government on account of loss of interest due to delayed payment of the tax, is not penal in nature and hence the same has to be allowed as an expenditure - the disallowance/addition made/confirmed by the AO/CIT(A) on the count is set aside – Decided in favour of Assessee. Stamping expenses – Held that:- The AO has disputed only the correctness of the details as regards the expenses claimed by the assessee on account of stamp charges in view of the fact that the assessee has not reconciled the expenses claimed - CIT(A) without giving any opportunity to the AO in the appellate proceedings, has simply accepted the contention of the assessee - No doubt the stamp duty charges are to be treated be incurred for the purpose of the business of the assessee - the details of the expenditure claimed has not been verified by the CIT(A) for the purpose of quantifying the claim of expenses – thus, the matter is remitted back to the AO for verification of details of the claim made by the assessee and accordingly quantify the eligible amount as allowable deduction – Decided in favour of Assessee. Disallowance u/s 14A of the Act – Held that:- Rule 8D of the Income-tax Act Rules is not applicable, the CIT(A) directed the AO to make the reasonable expenditure – there was no infirmity in the direction of the CIT(A) that since Rule 8D of the Income Tax Rules is not applicable for the assessment year under consideration – Decided against Revenue.
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