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2023 (1) TMI 1120 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - expenditure incurred to earn exempt income - HELD THAT:- Averments made by the Ld. Authorised Representative for the Appellant are factually correct as the Appellant is a debt free company having sufficient own capital for making investments. In the case of ACB India Ltd. [2015 (4) TMI 224 - DELHI HIGH COURT] has held that only investments yielding exempt income during the relevant previous year are to be considered while computing the average value of investment for the purpose of Rule 8D(2)(iii) of the Rules. In the present case the Assessing Officer has taken into consideration the entire Investments. Accordingly, we set aside the addition made under Section 14A - AO is directed to re-compute disallowance under Section 14A read with Rule 8D(2)(iii) of the Rules by taking into consideration only the investments yielding exempt income during the relevant previous year as per the judgment of ACB India Ltd. (supra). In view of the above Ground No. 1 to 4 raised by the Appellant are partly allowed. Depreciation on application software - excess depreciation claimed by the Appellant by adopting higher rate of 60% as against the applicable rate of 25% - HELD THAT:- As relying on Computer Age Managements Services Private Limited [2019 (7) TMI 1153 - MADRAS HIGH COURT] rate of 60% shall be applicable in the case of application software. In view of the same, we hold that the Appellant is entitled to claim depreciation at the rate of 60% in respect of application software. The disallowance of depreciation is, therefore, deleted. Admission of additional claims - Net foreign exchange gain - DR denied claim as it was not made in the return of income and was raised for the first time during the assessment proceedings - HELD THAT:- An assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. We hold that the CIT(A) erred in not adjudicating the claim of the Appellant raised by way of letter dated 15.11.2013. It has been contended that the net foreign exchange gain pertains to advance for purchase of capital asset and has been credited to the Profit & Loss Account under head Miscellaneous Income (Schedule 8). We direct the assessing officer to verify (a) whether the net foreign exchange gain pertains to the purchase of capital asset and (b) whether the same is included in Miscellaneous Income credited to Profit & Loss Account. In case on verification the Assessing Officer is satisfied that both the aforesaid conditions are satisfied, then the Assessing Officer shall reduce the amount of income by the amount of net Foreign Exchange Gain and reduce the same from the cost of capital asset as per Section 43A - Ground raised by the Appellant is treated as being allowed for statistical purposes.
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