Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 1353 - AT - Income TaxNature of expenses - addition of business development expenses - revenue or capital expenditure - HELD THAT:- We find that the issue relating to business development expenses to be treated as business expenditure and not capital expenditure, has been dealt and decided by the Co-ordinate Bench [2010 (11) TMI 1128 - ITAT AHMEDABAD] - Decided against revenue. Addition of depreciation claimed on plant and machinery given to Rajasthan State Electricity Board (in short RSEB) under sale and lease back transaction - HELD THAT:- After considering the facts of the case and material on record, we find that the issue involved in this ground is that the assessee company bought certain assets from RSEB in previous years and the same were leased back to RSEB. The assessee has been showing income from lease from RSEB and also claiming depreciation on the assets leased to RSEB. This fact that depreciation has not been claimed by RSEB and only claimed by assessee is not controverted by the Revenue. Further on perusal of the records, we find that the co-ordinate bench in assessee’s own case has decided similar issue [2010 (11) TMI 1128 - ITAT AHMEDABAD] confirm the order of the CIT (A) in vacating the disallowance of depreciation on sale and lease back transactions and dismiss the grounds of appeal of the revenue for all the years under consideration. Disallowance u/s 14A r.w.r. 8D - proportionate disallowance of interest expenditure u/s 14A - HELD THAT:- As per provisions of section 14A of the Act the duty is cast upon the Assessing Officer to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act. We find that average investments of the assessee are approximately 40% of the total share capital and reserve & surplus, addition in the reserve and surplus is arising mainly due to the exempted income earned by the assessee in previous years as well as during Asst. Years 2005-06 to 2007-08 which gives a holistic view that the company’s main business activities of sale of newspapers and printing material is not giving considerable profits to the company and its overall revenue from the main business activity is also going at the same pace without any major increase in revenue and the major contributory to the profits of the company is from profit from sale of investments and also from going through the assessment orders and details of capital gains we find that a considerable amount of purchase and sale activities of equity shares and mutual funds have been undertaken by the assessee. Also there has been a considerable movements of funds from bank account of the assessee and these funds are being used for the working capital as well as funds for the purpose of investments. There is no separate bank account maintained by the assessee to show that tax free funds have only been used for the purpose of investment and for this reason proportionate disallowance was made by the Assessing Officer which was corrected by by ld. CIT(A). Therefore, applying the ratio of the decision taken by the coordinate bench in assessee’s own case upholding the decision of ld. CIT(A) and looking to the facts of the present case as discussed above we are of the opinion that there is no reason to interfere with the order of ld. CIT(A). Accordingly, these grounds of appeals of Revenue are dismissed.
|