TMI Blog2013 (12) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company in the form of share capital and reserves at the relevant time which was sufficient to made the investment in the equity shares. Other expenses - Held that:- As per Rule 8D - The disallowance in respect of other expenses is sustained - Partly allowed in favour of assessee. Rectification of mistake - Held that:- Following CIT vs. Sakseria Cotton Mills Ltd. [1979 (2) TMI 17 - BOMBAY High Court] - The issue relating to allowability of deduction on account of provision for diminution in the value of investment while computing the book profit u/s 115JB of the Act was not the subject matter of appeal before the Tribunal - No direction were given by the Tribunal on this issue while restoring the matter to the file of the A.O. - There was no mistake in the order of the A.O. passed u/s 143(3) r.w.s. 254 of the Act on 30-12-2008 in allowing the deduction on account of provision for diminution in the value of investment calling for any rectification u/s 154 of the Act - Such mistake, was in the order originally passed by the A.O. u/s 143(3) - The rectification made by the A.O. on this issue to the order passed u/s 143(3) r.w.s. 254 of the Act by an order dated 19-8- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of his predecessor in assessee s own case for A.Y. 2007-08 wherein a similar claim of the assessee for depreciation @25% on dealership network was allowed by his predecessor treating the dealership network as intangible asset eligible for depreciation u/s 32(1)(ii) of the Act. 4. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that a similar issue was involved in assessee s own case for A.Y. 2007-08 wherein the claim of the assessee for depreciation on dealership network is allowed by the Tribunal vide its order dated 30-3-2012 passed in ITA No. 3571/Mum/2011 holding that the consideration paid by the assessee to AFL was for the purpose of enhancing its network in the field of money transaction business by acquiring rights or infrastructure or other advantages attached to the marketing network and since the same was in the nature of intangible asset as contemplated u/s 32(1)(ii) of the Act, the assessee was entitled to depreciation thereon @25%. Respectfully following the said decision of the co-ordinate Bench of this Tribunal in assessee s own case for A.Y. 2007-08 on a similar issue, we uphold the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther expenses at Rs. 1,11,732/- by applying Rule 8-D of the Income Tax Rules, 1962 and made a disallowance to that extent. On appeal, the ld. CIT(A) confirmed the said disallowance made by the A.O. u/s 14-A of the Act. 10. We have heard the arguments of both the sides and also perused the relevant material available on record. Although Rule 8-D of the Income Tax Rules, 1962 is applicable to the year under consideration i.e A.Y.2008-09 as contended by the ld. D.R., the contention raised by the ld. Counsel for the assessee is that the entire investment in equity shares having been made by the assessee out of its own funds, no disallowance on account of interest u/s 14-A r.w. Rule 8-D of the Income Tax Rules, 1962 can be made. In support of his contention, the ld. Counsel for the assessee has relied on the order of the Tribunal dated 21-10-2011 passed in ITA No. 4751/M/2010 in assessee s own case for A.Y. 2006-07 wherein the disallowance on account of interest made u/s 14-A was deleted by the Tribunal after having found that own funds to the extent of Rs. 60.75 cores were available with the assessee company in the form of share capital and reserves at the relevant time which was suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance u/s 14-A of the Act. In the said rectification order, the A.O. also made another addition of Rs. 1,28,60,000/- to the book profit of the assessee on account of provision for diminution in the value of investment relying on the amendment made in the provisions of section 115JB of the Act that with retrospective effect on 1-4-2001. The assessee accepted the addition made by the A.O. to the book profit on account of disallowance u/s 14-A of the Act by way of rectification u/s 14-A of the Act. He, however, challenged the order passed by the A.O. u/s 154 of the Act by preferring an appeal before the ld. CIT(A) disputing the addition of Rs. 1,28,60,000/- made by the A.O. to the book profit on account of provision for diminution in the value of investment. The ld. CIT(A) did not find merit in the said appeal of the assessee and dismissed the same holding that there was no mistake in the rectification order passed by the A.O. u/s 154 of the Act making the addition on account of provision for diminution in the value of investment to the book profit keeping in view the retrospective amendment made in the relevant provisions w.e.f. 1-4-2001. Aggrieved by the order of the ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the issue involved in the present case. 18. On the other hand, we find that the decision of Hon ble Bombay High Court in the case of Sakseria Cotton Mills Ltd. (supra) cited by the ld. counsel for the assessee is directly applicable in the present case. In the said case, assessment was originally completed by the I.T.O. for A.Y. 1952-53 by an order dated November 23, 1956 determining the total income of the assessee. In the said assessment, rebate was granted by the A.O. while computing the tax payable by the assessee. The assessee filed an appeal before the AAC against the order of assessment which was restricted to certain matters other than the rebate granted by the ITO. The matter of rebate was not agitated before the AAC and the AAC s decision did not deal with it. Pursuant to the AAC s decision, the ITO passed an order on March 10, 1961. On March, 8 1965, the ITO initiated rectification proceedings for the purpose of withdrawing the rebate granted to the assessee and in this context it was held by the Hon ble Bombay High Court that the rebate granted by the A.O. vide an order dated November 23, 1956 having not affected by the order of the AAC, the order of the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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