Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (11) TMI 357 - AT - Income TaxDepreciation claim - capital expenditure being technical fee and other expenses, incurred towards setting up of the Hotel project - Held that:- Tribunal decided this issue in A.Ys. 2007-08 in favour of the assessee and held that assessee was entitled to capitalise the amount and claim depreciation thereon. But for the purpose of verification of facts, this issue was sent back to the file of the AO with the direction to verify the amount of expenditure and allowing depreciation accordingly. Thus, this year also we send this issue back to the file of the AO with direction to follow the order of the Tribunal for the A.Ys 2007-08 & 2008- 09 and accordingly allow depreciation after verification of requisite facts. With these directions, this issue is sent back to the file of the AO and may be treated as allowed, for statistical purposes. Disallowance u/s 14A - Held that:- Invocation of section 14A is not automatic. The AO is bound to record his satisfaction before proceeding to make disallowance u/s 14A for more than the voluntary disallowance made by the assessee. The AO in the case before us failed to record any reasoning whatsoever or satisfaction and thus he did not assume jurisdiction to make disallowance u/s 14A read with rule 8D(2) (iii) as per law. Thus the disallowance deleted - Decided in favour of assessee Addition of notional interest on the loan given by the assessee to its wholly owned subsidiary - Held that:- Assessee never recorded the impugned amount in its books of account shows that none of the parties considered the amount of interest for the year under consideration as expenses / income. The assessee company took a decision for not booking the interest income in view of the facts and circumstances of the case as have been discussed in detail in above part of our order. Thus, in the given facts of this case, the impugned amount of interest was merely a hypothetical income, therefore it cannot be considered as income as per principles of ‘real income theory’. The AO has wrongly added it as part of income on notional basis and the same is directed to be deleted. This ground is allowed.
|