Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 567 - AT - Income TaxPenalty order passed u/s 271(1)(c) - disallowance of ROC fees - Held that:- ROC fees is not allowable as expenditure. The position of law in this regard is very clear. Ld. AR also did not make any submission. Thus, it was a clear cut disallowable amount, which has been claimed as revenue expenditure. So the levy of concealment penalty to this extent is confirmed. - Decided against assessee. Trade mark and patent expenses - Held that:- On this issue also Ld. AR did not submit any arguments and levy of concealment penalty on this amount is also confirmed. - Decided against assessee. Excess depreciation claimed in the return - Held that:- As it can be seen from the observations of the AO, it is case of the assessee right from the beginning that such claim was inadvertently made. The fact regarding the assets were duly disclosed in the return and only rate of depreciation was wrongly claimed. The basis of claim made by the assessee is that it has been described under Companies Act. Keeping in view the smallness of the claim and disclosures of particulars of assets and rate of depreciation and also the returned income of ₹ 8.90 crores, we are of the opinion that this could be an inadvertent mistake for which the assessee should not be held liable for concealment penalty. We, therefore, delete the penalty. - Decided in favour of assessee. Disallowance under section 14A r.w.r. 8D - Held that:- In the year under consideration the assessee has made substantial investment and for making such investment decision have to be taken and it cannot be said that assessee did not incurred any expenditure to earn dividend income which is substantial. Therefore, there is no force in the claim of Ld. AR that assessee did not incur expenditure for earning the dividend income. It is a case where expenses incurred by the assessee to earn exempted income are incurred from joint expenditure and for such situation formula has been prescribed in Rule 8D. In the present case, since assessee did not make any disallowance and even could not substantiate its explanation that no expenditure was incurred for earning exempted income, therefore, we don’t see any force in the claim of the assessee that disallowance on account of expenditure cannot be made as per Rule 8D. However, so far as it relates to component of interest which is a sum of ₹ 9,403/-, we are of the opinion that same is not sustainable for the reason that assessee’s own funds are much more the funds deployed by the assessee in investment out of which the assessee has earned tax free income. Such claim would be supported by the decision of Hon’ble Jurisdictional High Court in the case of HDFC Bank (2014 (8) TMI 119 - BOMBAY HIGH COURT), wherein it has been held that in a case where the own funds of the assessee are sufficient to make investment in tax free securities and shares, then the presumption would be that investment made by the assessee in tax free shares and securities would be out of the own funds of the assessee. Therefore, disallowance to the extent of ₹ 9403/- is deleted. disallowance of ₹ 12,70,726/- is upheld. - Decided partly in favour of assessee. Depreciation on goodwill - Held that:- Since the issue is covered by the Hon’ble Supreme Court in the case of Smifs Securities Ltd. (2012 (8) TMI 713 - SUPREME COURT), as accepted by either parties, the ground is allowed. Hence, the order of the Ld. CIT(A) is set aside on this issue and the AO is directed to allow the claim of depreciation on goodwill. - Decided in favour of assessee.
|