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2020 (8) TMI 48 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D - suo motu disallowance by the assessee - HELD THAT:- We deem it proper to restore the issue to the file of the AO with a direction to find out the investments which have yielded dividend income and to take into the same for considering the average value of investment. So far as the interest expenditure for the purpose of disallowance u/s 14A we find merit in the argument of the ld. Counsel that bank guarantee commission, interest on TDS, interest on service tax, interest on professional tax, interest paid to clients on advance brokerage, interest on clients’ margins money, etc. cannot be considered for the purpose of disallowance u/s 14A r.w. Rule 8D. We, therefore, deem it proper to restore the issue to the file of the AO with a direction to recompute the disallowance u/s 14A r.w. Rule 8D after taking into account the investments that have yielded dividend income and recompute interest expenditure on investments as per fact and law. AO, while doing so, shall keep in mind the total investment of the assessee, vis-à-vis the own funds and free reserves for making any disallowance out of any interest expenditure. He shall keep in mind the decision in the case of CIT vs. Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] and in the case of HT Media [2017 (8) TMI 962 - DELHI HIGH COURT] and Taikisha Engineering India Ltd. [2014 (12) TMI 482 - DELHI HIGH COURT]. - Decided in favour of assessee for statistical purposes. Disallowance on account of SAR expenses written off and advance of sale of shares written off - HELD THAT:- As decided in M/S. RELIGARE SECURITIES LTD. [2018 (3) TMI 1529 - DELHI HIGH COURT] assessee had to follow SEBI direction and by following such direction, the assessee claimed the ascertained amount as liability for deduction - the expenditure on issue of shares under the Employees Stock Option could be allowed as staff welfare expenditure - Decided in favour of assessee. Higher depreciation on UPS - assessee claimed depreciation on UPS @ 60% treating the same to be part of computer and peripherals - HELD THAT:- As in the case of BSES YAMUNA POWERS LLD. / BSES RAJDHANI POWERS LTD. [2010 (8) TMI 58 - DELHI HIGH COURT] has held that UPS is an essential part of computer system and is eligible for depreciation @ 60% - no infirmity in the order of the CIT(A) in directing the AO to allow depreciation @ 60% on UPS. Accordingly, the order of the CIT(A) is upheld and the ground raised by the Revenue is dismissed.
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