TMI Blog2015 (1) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... raised a loan it can be presumed that the investments were from interest free funds available - Revenue has not placed any material on record to controvert the submissions made by the Assessee and had also not brought on record any binding contrary decision in its support - no disallowance u/s. 14A on account of interest can be made – Decided in favour of assessee. Depreciation claimed on motorcar disallowed – Car used for wholly and exclusively for business purpose or not – Held that:- Assessee has submitted that assessee was allowed depreciation on the same car in immediately preceding financial year by CIT(A) and Revenue has not preferred appeal against the order of CIT(A) - Assessee from the bank statement of the firm has also demon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 14A of the Act of ₹ 63,455/- being proportionate interest expenses for earning tax free income ignoring the fact that appellant made investment from sufficient interest free funds available for a short period of 35 days only. Ld. CIT (A) ought to have deleted the addition of interest expenses. It be so held now. 2. Ld CIT (A) erred in law and on facts in confirming disallowance made by AO of ₹ 2,31,100/- towards depreciation claimed on motorcar owned by the appellant used wholly and exclusively for business of the appellant. Ld. CIT (A) factually erred in holding that motorcar registered in the name of the partner was also owned by the partner and not the appellant firm. Ld. CIT (A) ought to have deleted disallowance of dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring funds to make investment in mutual funds therefore the AO was not justified in making disallowance of interest expenditure u/s. 14A of the I T Act. During the course of appellate proceedings the AR was asked to prove from the bank statement and the bank book of the appellant that no borrowed funds has been utilized in acquiring the units of DSPML Funds. However the AR did not furnish or prove such nexus between the borrowed funds and its utilization in the DSPML Funds. It is the duty of the appellant to prove that no part of interest bearing funds is utilized in acquiring the units of the mutual funds. Merely saying that he had sufficient non interest bearing funds at his disposal is not sufficient. As the appellant failed to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 2.63 cores in DSPMC fund. Before us, Ld. AR has pointed to the balance sheet as at 31st March, 2006 and pointed to the fact that the share capital of the partners as on 31st March, 2006 was in excess of ₹ 11.86 cores as against the investments of ₹ 2.63 crore. Hon ble Bombay High Court in the case of Reliance and Power Ltd vs. CIT (2009) 313 ITR 340 (Bombay) has held that if there are interest free funds available to a assessee sufficient to meet its investment and at the same time the assessee has raised a loan it can be presumed that the investments were from interest free funds available. Before us Revenue has not placed any material on record to controvert the submissions made by the Assessee and had also not brought on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998 owned wholly or partly by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed- (i) (in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage ofn the actual cost thereof to the assessee as my be prescribed) (ii) (in the case of any block of assets, such percentage on the written down value thereof as my be prescribed) 5.2 In other words, the appellant has necessary to be owner (wholly or partly) of the asset in respect of which depreciation has been claimed. In this case the funds has been used by the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the funds were employed by the assessee for the purpose of claim of depreciation u/s. 32 of the IT Act. Action of the AO in denying the depreciation is therefore confirmed. 9. Aggrieved by the order of Ld. CIT(A), Asssessee is now in appeal before us. 10. Before us, Ld. AR submitted that the motor car on which the depreciation has been disallowed was purchased in financial year 2004-05 and the claim of depreciation though disallowed by the AO, but Ld. CIT(A) vide order dated 06-06-2008 had allowed the claim of depreciation and against the aforesaid order of Ld. CIT(A), no appeal has been preferred by Revenue. He further submitted that the motor car is reflected in the Balance sheet of the firm and has been purchased from funds of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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