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2020 (5) TMI 118 - AT - Income TaxAddition u/s 14A r.w. rule 8D - disallowance being 1% of the average investment - HELD THAT:- Disallowance of expenditure u/s 14A exceeds the dividend income claimed as exempt by the assessee. The Therefore, disallowance on account of administrative expenses under Rule 8D(iii) is hereby restricted to the extent of exempt income so claimed by the assessee. In the result, the ground of appeal is partly allowed. Disallowance of depreciation on windmill - treating the civil work & foundation as building on which depreciation is allowed @ 10% and electrical items/ components as plant & machinery on which depreciation is allowed @ 15% instead of rate of 80% claimed by the assessee - HELD THAT:- We find that the matter is no more res integra and is covered by the decision in case of K.K. Enterprises [2015 (2) TMI 508 - RAJASTHAN HIGH COURT] and Mehru Electricals [2016 (7) TMI 708 - RAJASTHAN HIGH COURT] and we fail to understand that where the said decisions were brought to the notice of ld CIT(A), what stopped him in following the same, being the decision of the Hon’ble Jurisdictional High Court. In the result, the ground of appeal is allowed. Disallowance of additional depreciation u/s 32(1)(iia) - plant & machinery which were used for less than 180 days in the Previous Year 2013-14 - case of the Revenue is that such additional depreciation can be claimed only in the first year in which the asset is acquired and installed, and cannot be carried forward to be claimed in the subsequent year - HELD THAT:- Statutorily provides for carry forward of the balance 50% of the additional depreciation in the immediately succeeding previous year in which the plant & machinery is acquired and installed and though the said provisions have been introduced with effect from 1.4.2016, the Courts in case of Shri T.P Textiles and Rittal India [2017 (3) TMI 739 - MADRAS HIGH COURT] have held the same to be clarificatory in nature and thus have a retrospective application. Therefore claim of remaining additional depreciation is hereby allowed and the matter is decided in favour of the assessee and against the Revenue. In the result, the ground of appeal is allowed. TDS u/s 195 - Disallowance of commission paid to non residents u/s 40(a)(ia) - HELD THAT:- Neither the A.O. nor the ld. CIT(A) has examined the actual nature of services rendered by the agents so as to bring them in the ambit of the fee for technical services. Even where the claim of the assessee as sales commission is to be considered, the actual nature of payment is required to be examined. The assessee has even not claimed the benefit under any DTAA if any between the India and the country of recipient of these payments. Since neither the A.O. nor the ld. CIT(A) have examined this issue by considering the relevant facts as well as the respective DTAAs if any between the India and the country of the recipient/non-resident, therefore, in our considered opinion, this issue requires a proper verification and examination. Accordingly, we set aside this issue to the record of the ld. CIT(A) for adjudication of the same afresh. Needless to say that if the payment made by the assessee is not chargeable to tax in the hands of the recipient then the same is not liable for TDS merely because of the explanation to Section 195 of the Act as it is a prerequisite contention for invoking provisions of Section 195 of the Act that the payment is chargeable to tax in India in the hands of the recipient. Ground of appeal is allowed for statistical purposes.
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