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2021 (7) TMI 1410 - AT - Income TaxRectification of mistake - Addition on account of depreciation on fixed assets u/s. 40a(ia) read with section 37 in respect of capitalization of professional fees capitalized of certain expenses FCCB Premium and FCCB Issue Expenses - HELD THAT:- The year before us is A.Y. 2007-08 wherein the depreciation on fixed assets is required to be allowed only as consequential effect of depreciation already allowed by the ld. AO in the A.Y. 2005-06. We find that no expenditure was per se incurred during the year relating to this issue and hence, the provisions of Section 40(a)(ia) of the Act could not be made applicable for A.Y. 2007-08. We find that directions of this Tribunal to examine the allowability of expenses u/s. 40(a)(ia) of the Act for A.Y. 2007-08 would only result in impossibility of performance on the part of assessee in as much as no expenditure was incurred by the assessee in A.Y. 2007-08 thereof. The expenditure falling within the ambit of Section 40(a)(ia) had been incurred by the assessee in A.Y. 2005-06 on which depreciation is already allowed by the ld. AO in A.Y. 2005-06. Hence, the A.Y. 2007-08 is only consequential year of allowing depreciation on fixed assets and expenses falling under 40(a)(ia) of the Act. Miscellaneous Application of the assessee is allowed.
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