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2014 (12) TMI 294 - AT - Income TaxDisallowance u/s 14A r.w Rule 8D Whether the revenue was right in deleting the disallowance u/s 14A holding that no dividend income was earned by the assessee ignoring the provisions u/s 14A Held that:- Following the decision in Commissioner of Income Tax-IV Versus Holcim India P. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] no exempt income has been earned by the assessee from the investment made in the subsidiary - there was a contradiction in the submissions made by the revenue that the assessee had acquired shares for earning of dividends - assessee is an investment company and had invested by purchasing a substantial number of shares and thereby securing right to management - Possibility of sale of shares by private placement etc. cannot be ruled out and is not an improbability - Dividend may or may not be declared - Dividend is declared by the company and strictly in legal sense, a shareholder has no control and cannot insist on payment of dividend - the CIT(A) erred in confirming the order of the AO - the deletion of ₹ 63,16,000/- added u/s 14A read Rule 8D is directed. Expenses on Air Condition and renovation of lease hold premises disallowed Held that:- Out of amount of ₹ 4,80,000/- in respect of painting and ₹ 1,24,785/- in respect of sign board has been allowed by AO as Revenue expenditure - The balance ₹ 38,14,000/- was held to be capital expenditure, which has been allowed by the ld CIT(A), except a sum of ₹ 5,50,000/- on ducting of air condition - The nature of expenditure reveals that they were in respect of interior work of an office premises - The office premise of the assessee is a leased premise - The lessor has provided the air-conditioning - Only the ducting was carried out by the assessee - no asset was created so as to hold the expenditure to be capital expenditure relying upon COMMISSIONER OF INCOME TAX Versus M/S AMWAY INDIA ENTEPRISES [2011 (11) TMI 4 - DELHI HIGH COURT] expenditure incurred and claimed was for carrying out interior of a leased premise is revenue expenditure Decided in favour of assessee.
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