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2014 (3) TMI 1171 - AT - Income TaxAdditional depreciation - claim not allowed in the preceding year on the asset put to use by the assessee for less than 180 days - HELD THAT:- As decided in assessee's own case provisions of the Act are very clear. The second proviso to section 32(1), which restricts the depreciation to 50% of the percentage prescribed in respect of assets used for less than 180 days is applicable for additional depreciation also. There is no provision in the act to carry forward and allow the balance depreciation in the next year. Further the additional depreciation is allowable only in respect of new machinery or plant that has been acquired, when the balance 50% of the additional depreciation is proposed to be claimed, the assets are not new machinery or plant eligible for additional depreciation. These assets form part of the opening written down value of the assets. Therefore, these are not entitled for the said additional depreciation. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Rule 8D of the Income Tax Rules is not applicable in the case of the assessee because it came into effect only w.e.f 24.03.2008. Prior to this date the decision pointed out by the Ld. A.R. would be applicable. In these circumstances, we are of the considered view that Ld. Assessing Officer reasonably estimated the disallowable expenses being 2% of dividend income earned by the assessee. Therefore, we set aside the order of the Ld. CIT (A) and confirm the order of the Ld. Assessing Officer on this issue. Treating the remission of sales tax liability as income of the assessee U/s. 41(1) - assessee argued that there was no remission of liability U/s. 41(1) of the Act as the amount was prepaid on the net present value basis and therefore, should not be included in the profits and gains of the assessee - HELD THAT:- This issue was held in favour of the assessee by the decision of the Tribunal [2013 (11) TMI 1774 - ITAT CHENNAI] as held that it is a simple case of collecting the amount at net present value which is due later on and even the formula for collecting the net present value was also given by the SICOM and the amounts have been paid as per that formula. Therefore, such payment of net present provisions of section 41(1)(a) of the Income Tax Act, 1961 we are fully conscious that issue before us is regarding statutory liability and the above discussion and provisions of the Indian Contract Act referred to by us in the above para relate to the contractual liability. Disallowance of Loss on account of exchange fluctuation - HELD THAT:- These transactions had arisen only due to the international business transaction of the assessee in order to protect itself from foreign exchange fluctuation. Accordingly, any expenditure related to the same has to be treated as expenditure incurred in the ordinary course of the business of the assessee and shall be allowed as an deduction under the provisions of the Act and shall not be considered as speculative business transaction. Since the facts are not clear from the order of the Ld. Assessing Officer and the Ld. CIT (A); like our predecessors we hereby remit back the matter to the file of Ld. Assessing Officer for verifying the nature of loss incurred and consider the issue on transaction to transaction basis and decide according to law and merits.
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