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2018 (3) TMI 2031 - AT - Income TaxAdditional depreciation of 10% claimed u/s. 32(1)(iia) - additions made to plant and Machinery that was put to use for less than 180 days - as submitted that the AO has no considered the fact that the assessee is a manufacturer of tea and only 40% of the income computed as per Rule 8 of the Income Tax Rules is liable for tax and therefore, the disallowances made are to be restricted to 40% - HELD THAT:- Following this tribunal order [2017 (9) TMI 2024 - ITAT CHENNAI] for assessment year 2012-13 we hold that the assessee was eligible for claiming the balance 10% depreciation in the impugned assessment orders. AO is directed to allow such claim. The assessee’s plea that such disallowances are to be restricted to 40% in accordance with Rule 8 of the Income Tax Rules is also in accordance with provisions and accordingly, the AO is directed to restrict the disallowances to 40%. The assessee’s appeal for these two years stands allowed. Disallowances u/s. 14A r.w.r 8D - expenditure incurred for earning dividend income - computation made under Rule 8D(2)(iii) - CIT(A) restricted the disallowances u/s. 14A r.w.r 8D to the extent of exempt income - HELD THAT:- We direct the Assessing Officer to re-compute the disallowances under Rule 8D(2)(iii) by taking the amount equal to ½ percentage of the average value of the investments which have given rise to the income which does not form part of total income. Thus, the corresponding grounds are partly allowed for statistical purposes.
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