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2020 (3) TMI 419 - AT - Income TaxLease-hold refurbishment expenses - Revenue expenditure - HELD THAT:- Considering the decision of Tribunal on similar set of fact when the similar expenses were allowed as revenue expenditure in favour of assessee, no variation in facts nor any contrary law is brought is brought to our notice therefore, respectfully following [2017 (6) TMI 597 - ITAT MUMBAI] this ground of appeal is allowed in favour of assessee. Disallowance of provision for depreciation on investment - HELD THAT:- It was open to the ITO and the assessee to ascertain true and proper income while submitting income-tax returns. That, for valuing the closing stock, it was open to the assessee to value the stock at cost or market price whichever is lower. That, the assessee was valuing the stock-in-trade at cost for the purposes of statutory balance sheet but, for the purposes of income-tax return, the assessee was valuing the stock-in-trade at cost or market value whichever was lower and that practice was accepted by the Department for 30 years. Consequently, the Supreme Court allowed the appeal filed by UCO Bank [1999 (9) TMI 4 - SUPREME COURT]. In our view, the judgment of the Supreme Court in UCO Bank's case (supra) squarely applies to the facts of this case. In fact, the present case before us is on a stronger footing because in the case of UCO Bank (supra), the loss was not debited to the profit and loss account whereas in this case, as can be seen from the working at pages 25 and 26 of the paper-book, the loss has been debited to the profit and loss account which is reflected as a provision for Liability in the balance sheet and shares and securities were valued at cost on the asset side. For the reasons given hereinabove, we answer the above quoted question in the affirmative i.e. in favour of the assessee-bank and against the Department. Disallowance under section 14A - HELD THAT:- The assessee has not allocated any expenses for earning the said dividend income. The Assessing Officer invoked the provision of Rule 8D and calculated the disallowance under section 14A of ₹ 7,81,083/-. Admittedly, the provisions of Rule 8D is not applicable for the year under consideration. The ld. AR of the assessee prayed that disallowance under section 14A should be restricted to 2% of the total exempt income and strongly relied upon the decision of Hon’ble jurisdictional High Court in Godrej Agrovet Ltd. [2014 (8) TMI 457 - BOMBAY HIGH COURT] Hon’ble jurisdictional High Court in Godrej Agrovet Ltd. (supra), while considering the disallowance under section 14A for A.Y. 2005-06 restricted the disallowance to the extent of 2% of total exempt income. Considering the decision of jurisdictional High Court, the disallowance for the year under consideration is restricted to 2% of the exempt income. Depreciation on printers, cables, routers and other connectivity charges - Assessing Officer while passing the assessment order allowed depreciation @ 15% against the claim of assessee of 60% - HELD THAT:- We have noted that Hon’ble Delhi High Court in DCIT vs. BSES Rajdhani Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] and in CIT vs. Bonanza Portfolio Ltd. [2011 (8) TMI 1058 - DELHI HIGH COURT] held that computer peripherals and accessories form an integral part of computer system and eligible for depreciation @ 60%. Considering the decision of Tribunal, the Hon’ble Delhi High Court is directed the Assessing Officer to allow the depreciation @ 60% on printers, cable lines and other connected peripherals. Hence, this ground of appeal is allowed. Disallowance under section 14A/Rule 8D(2)(iii) to 50% of administrative expenses - HELD THAT:- Assessing Officer while making the disallowance considered the average value of entire investment made for earning exempt income. The ld. CIT(A) restricted the disallowance to 50% of the amount on estimation basis. Considering the decision of Special Bench of Delhi Tribunal in ACIT vs. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] we direct the Assessing Officer to recompute the disallowance by considering only those investments which yielded exempt income during the year. Before making recomputation of disallowance under this clause, the Assessing Officer shall grant opportunity to the assessee. In the result, this ground of appeal is allowed for statistical purpose.
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