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2018 (9) TMI 1314 - AT - Income TaxRevision u/s 263 - erroneous claim of depreciation @ 30% instead of 15% - Held that:- We find that the assessment order was completed u/s 143(3) of the Act and the AO had called for certain details in his questionnaire, but the details with regard to the issues pointed out by the Pr. CIT in his order u/s 263 were not called for and verified by the AO. Assessee, in fact, in reply to the notice u/s 143(3) rws 263 had admitted that it had made an erroneous claim of depreciation @ 30% instead of 15%. Thus, it is clear that on this issue itself, the AO has not made any verification. Similarly, with regard to other issues also we do not find any verification made by the AO. Although the ld. Counsel for the assessee filed additional grounds of appeal and also argued that revision cannot be done on the basis of audit objection, there is no material before us with regard to such audit objection on the basis of which revision has been made. Addition u/s 14A - Held that:- We find that the issue raised in these grounds is covered in favour of the assessee by the decisions of the coordinate benches of this Tribunal and also by the decision of The Hon’ble Delhi High Court in the case of Cheminvest Ltd., (2015 (9) TMI 238 - DELHI HIGH COURT) wherein it has been held that section 14A will not apply where no exempt income is received or receivable during the relevant assessment year. Therefore, subject to verification that the assessee has not earned any exempt income during the relevant P.Y., ground treated as allowed and other grounds are not adjudicated as it would only be an academic exercise. Capitalization of interest - Held that:- Assessee submitted that interest expenditure debited to the P&L A/c is for the loan taken for specific purpose and not for the purpose for the capital work-in-progress, therefore, capitalization of interest is not called for. Assessee has filed financial statement and as seen from the schedule 20 thereof, assessee has paid interest on term loans and other interest of bank and finance charges. Assessee’s contention that the interest paid is towards a particular loan, is not established. As assessee submitted that this issue may be remanded to the AO for verification. We remand this issue to the file of AO with a direction to verify assessee’s contention that capital work-n-progress of ₹ 1,00,18,000/- was from out of the cash generated from operations/internal accruals and not from interest bearing funds. Ground as allowed for statistical purposes.
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