Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 993 - AT - Income TaxDisallowance of weighted deduction u/s.35(2AB) - R & D Division Expenses - assessee is engaged in the business of manufacturing, trading, and export of dyes and dyes intermediates - Held that:- The issue is covered in favor of the assessee by the order of this Tribunal in assessee’s case [2018 (4) TMI 253 - ITAT AHMEDABAD] wherein as held that there is no scope for any other interpretation and since the approval is granted during the previous year relevant to the assessment year in question, we are of the view that the assessee is entitled to claim weighted deduction in respect of the entire expenditure incurred under Section 35(2AB) of the Act by the assessee. Addition u/s. 14A r.w. Rule 8D - Held that:- As decided in assessee's own case [2018 (4) TMI 253 - ITAT AHMEDABAD] interest paid by the assessee was subsequently and assessee was having sufficient interest free fund to cover up the investment earning exempt income. Therefore, we are of the considered opinion that provisions of Section 14A are not attracted. Disallowance of depreciation expenses and vehicle expenses - allowable busniss expenses - personal use of asset - Held that:- We are of the considered opinion that such depreciation are allowed as it is not disputed that funds for purchases of the car were provided by the assessee company which is also reflected in the accounts of the assessee company. In our opinion, when the car is actually used for the purpose of business of the company depreciation thereon cannot be denied. Regarding the vehicle expenses and insurance expenses, we find that the cars were used by the body corporate and these were also shown as fixed assets in the balance sheet in the year under consideration. As we have allowed the depreciation in respect of such vehicles, we are inclined to allow the amount of vehicle and insurance expenses to the extent deleted by the CIT(A). We also note that the assessee was a limited company and, hence, it could act through its directors only. Thus, if cars were used by the directors for their personal use also, the same could be added to the income of the directors as perquisite but insofar as, the assessee-company was concerned the entire expenditure was for its business as the directors were appointed to look after the business of the assessee-company. Hence, no disallowance could be made in the hands of the assessee-company on account of personal use of directors. - Decided against revenue
|