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2018 (5) TMI 937 - AT - Income TaxDisallowance of depreciation (normal and additional) pertaining to colour solution machines - Held that:- AO erred in stating that the colour solution machines installed in the dealer’s premises is not in any way connected with the mother/main machines responsible for producing the paints and the colour solution machines are comparable to air conditioner etc. due to their nature of functioning and hence, need to be treated as furniture and fixture is erroneous and baseless as discussed by us above and for the sake of brevity is not repeated again. We also note that the AO in the earlier assessment year and in subsequent assessment year i. e. 2012-13 and 2013-14 has not disputed the allowability of normal and additional depreciation on colour solution machines for the assessment year prior to the subject assessment year and in subsequent assessment years (i. e. AYs 2012-13 and 2013-14) post issuance of direction by Ld. DRP in the subject assessment year. In the aforesaid facts and circumstances of the case, the AO ought to have been consistent in his approach and, therefore, for the reasons stated aforesaid, we do not find any reason to interfere in the order of the Ld. DRP and we confirm the same. This ground of appeal of revenue is dismissed. Disallowance of depreciation (normal and additional on certain assets - Held that:- Remarks given that these are assets which were rightly claimed to be plant and machinery. The Ld. DRP has rightly excluded the aforesaid assets from the list of plant and machinery and reclassified it as furniture and fixture. We do not find any infirmity in the order of the Ld. DRP and, therefore, we confirm the finding of the Ld. DRP. This ground of appeal of revenue is also dismissed. Addition u/s. 14A - Held that:- Admitted factual position that no loan funds were in the books of accounts of the company, there cannot be any question of payment of interest against the loan funds and consequently disallowance of interest expenses in terms of Rule 8D(2)(i) or (ii) of the Rules. Since there is no unallocable interest the DRP has rightly held that no interest expenses can be disallowed.
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