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2023 (8) TMI 1177 - AT - Income TaxDeduction u/s 32AC - Investment in new plant or machinery - HELD THAT:- In the taxing statute there is no scope for intendment, and if the language is simple, plain, unambiguous and clear, the same has to be applied howsoever harsh the consequences may be. There is no equity in taxing statute, and literal rule of interpretation is to be followed if there is not ambiguity in the provisions and is in simple clear and plain language. Thus, as could be seen from clause(v) of sub-section (4) of Section 32AC, the “new asset” shall not include any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any previous year. Thus, in the instant case , Pollution Control Equipment’s admittedly carry prescribed rate of depreciation @100%, and hence the entire actual cost of Pollution Control Equipment’s is deductible while computing income chargeable to tax under the head “Profits and gains of business or profession” of any previous year. It is merely because the aforesaid Pollution Control Equipment’s were acquired and installed after 30th September, 2013 and were put to use for less than 180 days during the year under consideration, the depreciation allowed shall be 50% in the year under consideration while the remaining 50% depreciation shall be allowed in the subsequent assessment year, but the facts remains which cannot be negated is that the whole of the actual cost of Pollution Control Equipment’s is deducted at the prescribed rate of depreciation @100%, and is hit by clause (v) sub-section (4) of Section 32AC, and shall be ineligible for claim of deduction u/s 32AC. The assessee, if it meets all other conditions for grant of deduction u/s 32AC, shall be allowed deduction u/s 32AC in the subsequent year, for which the assessee has to meet all the statutory requirements as mandated by Section 32AC, and the onus is entirely on the assessee to demonstrate and prove with evidence before the AO that it is eligible and entitled for deduction u/s 32AC in the immediately succeeding year as it meets all the conditions as are prescribed u/s 32AC. Assessee submitted that the assessee did not claim deduction u/s 32AC in the return of income filed for immediately succeeding assessment year, as the claim was made in the return of income filed for current assessment year. Be it as it may be, if the assessee meets all the stipulated conditions as are prescribed u/s 32AC for immediately succeeding assessment year for which onus is entirely on the assessee to demonstrate and prove by evidence before the AO that it is eligible and entitled for deduction u/s 32AC, the AO is directed to consider the claim of the assessee for deduction u/s 32AC for immediately succeeding year viz. ay: 2015-16, on merits in accordance with law. Reference is drawn to CBDT circular No. 14 of 1955, dated 11.04.1955. The grounds of appeal numbers 1 to 5 are partly allowed , in the manner indicated above. Disallowance u/s 14A r.w.s 8D - HELD THAT:- We are principally in agreement with assessee that in case if the investments are made out of mixed use funds, the presumption shall apply that the assessee has used its own interest free funds available for making investments in the securities/mutual funds provided the own interest free funds are sufficient to cover the aforesaid investments, but complete facts are not there on record as audited financial statements for relevant period are not filed but are filed for subsequent financial year i.e. 2014-15, and, thus, for limited purposes, we are remitting the matter back to the file of the AO for verification of this aspect and if it is found that own interest free funds are sufficient to cover investments made in securities/mutual funds, no disallowance of interest expenses shall be made as it will be presumed that the assessee has invested its own interest free funds for making investment in securities/mutual funds. The assessee is directed to file relevant records with the AO. So far as disallowance of administrative expenses by authorities below, by invoking provisions of Section 14A read with Rule 8D(2)(iii) is concerned , no serious contentions were raised by the ld. Counsels for the assessee. As in assessee’s own case has confirmed the additions made by authorities below by disallowing administrative expenses by invoking provisions of Section 14A read with Rule 8D(2)(iii) of the 1962 Rules.
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