Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 567 - AT - Income TaxDisallowance u/s 14A read with Rule-8D - HELD THAT:- As observed that the opening balance of investments was ₹ 85.67 Crores, and, thus, investments subjected to Rule-8D were not brought forward from earlier years. It was also observed by the CIT (A) that the AO could not demonstrate that loans were borrowed for making investments in dividend yielding assets only. We find no reason to interfere with this factual finding of the Ld. CIT (A). Assessee had submitted a computation before the AO wherein it was submitted that the disallowance, if any, could not exceed ₹ 8,34,934/- being the costs of treasury operations - As seen that neither the Assessing Officer nor the Ld. CIT (A) has commented on this computation of the assessee. Thus, apparently, the satisfaction, as contemplated and laid down in the case of Maxopp Investment Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT] to be recorded by the Assessing Officer is completely absent and, therefore, in absence of the required satisfaction, such disallowance could not have been made - since, the Ld. AR has argued that the disallowance may be restricted we, accordingly, restrict the disallowance and direct the AO to delete the remaining disallowance. Ground No.1 of the assessee’s appeal stands partly allowed. Addition on account of interest on Income Tax Refund - HELD THAT:- AR has fairly accepted that this amount is taxable in the hands of the assessee. However, while dismissing this ground of the assessee’s appeal, we direct that should the interest amount vary subsequently depending on the outcome of the appeals before the Hon’ble High Court and the Hon’ble Apex Court, the AO should substitute such varied amount as the case may be. Capital subsidy received during the relevant assessment year from the written down value of the respective block of assets - HELD THAT:- It is settled law that the taxation of subsidy, by whatever name called, is determined by the purpose for which the subsidy is granted and not the form/mode/manner in which the subsidy is received/disbursed. We find no reason to interfere with the findings CIT (A) on the issue that the impugned subsidy was a capital receipt. CIT (A) was not correct in directing the AO to reduce the amount of subsidy from the actual cost of fixed assets and, thereafter, allow depreciation on such actual costs so arrived that. We set aside the order of the Ld. CIT (A) on this issue and we direct the Assessing Officer to allow deprecation on the actual cost of assets without reducing the amount of subsidy there from. Thus Ground No.3 of the assessee’s appeal stands allowed. Addition on account of license fee - HELD THAT:- It is seen that this issue is covered in favour of the assessee by the following orders of the Hon’ble High Court and the Tribunal rendered in assessee’s case in the earlier Assessment Years. CIT-DR also could not controvert this fact. In view of the binding judicial precedents in asssessee’s own case as enumerated above, we find no reason to interfere with the findings of the CIT (A) on the issue. Claim of depreciation in respect of UPS - 60% OR 15% - HELD THAT:- UPS is to be considered as an integral part of the computers and depreciation is to be allowed @ 60%. Accordingly, in view of the settled legal position, we find no reason to interfere with the findings of the Ld. CIT (A) on this issue also. See CIT vs. BSES Rajdhani Power Limited [2018 (2) TMI 299 - ITAT DELHI]. Depreciation in respect of energy saving and pollution control equipment on the ground that it was not put to use - AO disallowed the claim of depreciation by alleging that the assessee has only established the factum of purchase of assets and not the condition of assets being put to use - HELD THAT:- Provisions of Sec.32 do not mandate such requirement. To assume that having purchased and installed the energy saving devices and pollution control equipment but not putting the same to use is, thus, just a baseless surmise and conjecture which stands negated by the certificates from the Chartered Engineers. Therefore, it is our considered opinion that the Ld. CIT (A) was absolutely correct in holding that having installed the devices, the assessee had extensively put the assets to use for the purposes of business and that under the law, the assessee was not required to monitor the outcome of use of such items in its business. The Hon’ble Delhi High Court in the case of CIT vs. Insilco Ltd. reported [2009 (2) TMI 31 - DELHI HIGH COURT] had held that it would be more appropriate to understand the expression ‘use’ as comprehending cases where the machinery is kept ready by the owner for its use in its business.
|