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2014 (12) TMI 136 - AT - Income TaxCapital expenses or revenue expenses – huge expenses towards repair and maintenance on machinery and plant made – Held that:- In respect of the addition(s) of ₹ 3,11,405/- and ₹ 4,26,400/-, such additions were also made in earlier years and the Tribunal has decided the issue in favour of the assessee – following the decision in DCIT, CIRCLE-1(1), BARODA Versus BANCO PRODUCTS (I) LTD. [2012 (12) TMI 572 - ITAT AHMEDABAD] wherein it has been held that the expenditure is in Revenue nature – Expenses that were incurred on purchase of band knives for use in splitting machine - The nature of the item indicates that it is spare parts which require frequent replacement - the expenditure was incurred on removing the roller jammed in order to make it functional - the order of the CIT(A) is upheld – Decided against revenue. Addition made u/s 14A r.w Rule 8D – Held that:- Assessee rightly contended that Rule 8D would be applicable only with effect from AY 2008-09 as decided in GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the AO was not justified in computing the disallowance by invoking the provisions of Rule 8D of the I.T. Rules, 1962 - the AO has observed that during the financial year, the assessee has received dividend income of ₹ 19,31,316/- and Long Term Capital Gain on the sale of Equity shares which is exempt under the IT Act - The AO has observed that the assessee has not given details as to when shares were acquired and what was the source of financing cost of acquisition of shares, etc. in earlier years and current year - the assessee has earned exempt income, therefore the expenditure related to earning of such income would be disallowable in terms of the provisions of section 14A of the Act - disallowance of ₹ 2,05,481/- is restricted to disallowance of ₹ 1 lac – Decided partly in favour of assessee.
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