TMI Blog2015 (9) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... 8D(2)(ii). We, accordingly, consider it a serious lapse on the part of the ld. CIT(A) in not so directing the A.O. So much so, in our view, the parties themselves should have pointed out this during hearing, which exhibits or reflects smugness on the part of the assessee and a lack of preparation on the part of the ld. Departmental Representative (DR). We direct accordingly, so that the disallowance of interest u/s.14A r/w Rule 8D(2)(ii) shall be with reference to the interest cost for the entire year, i.e., ₹ 204.52 lacs, and not ₹ 136.35 lacs. As regards our competence to so direct, we rather consider it our bound and duty to do so. Sale of depreciable assets - Disallowance of deprecation - the assessee found favour with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul Joshi For the Respondent : Shri Love Kumar ORDER Per: Sanjay Arora,AM. These are cross appeals, i.e., by the Assessee and the Revenue, agitating the part allowance of the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2009-10 vide order dated 20.12.2011 by the Commissioner of Income Tax (Appeals)-23, Mumbai ('CIT(A)' for short) vide his order dated 10.05.2012. Assessee's Appeal (in ITA No. 5019/Mum/2012) 2. The same raises a single ground, reading as under: 'On the facts and circumstances of the case, the Learned CIT(Appeals) has erred in not deleting the entire addition of ₹ 98,66,326/- m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, seasonal. The A.O., analyzing the assessee's activity in the form of purchase and sale of cotton yarn for the different months of the year, found no purchases of yarn for the months of July to October, 2008, while that for the months of June and November, 2008 were also, at a little over 2% of the total purchases for the year, minimal. On the credit side, there was again no sale for the months of August to October, 2008, with minimal sales being observed for the months of June, July, November and December, 2008. There was, thus, correspondingly no business activity, so as to entail deployment of capital, for four to six months during the year. He, accordingly, attributed 1/3rd of the total interest for the year (at ₹ 204 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds from its regular business activities of trading in cotton yarn by the assessee during non-seasonal months. So, however, unless he is able to exhibit the investment of those funds in taxexempt instruments, i.e., which yield or are liable to yield tax-exempt income, it cannot be said that the interest on the said funds for the corresponding period is liable for disallowance u/s.14A(1). The ld. AR would in fact, with reference to the assessee's annual accounts for the current year, show that there has been rather a decline in the investment in mutual funds, i.e., the relevant investment, during the year, i.e., from ₹ 3090.24 lacs as at the beginning of the year to ₹ 973.45 lacs at its end. Though the fund position as at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for allocation as an indirect cost, i.e., on a pro rata basis. Both the interest cost being allocated, i.e., as between the incomes forming and not forming any part of the total income, as well as the said incomes themselves, it needs to be noted, are for the whole year. This, even otherwise patent, becomes inevitable in the instant case as the assessee neither before us nor before the first appellate authority has made out any case against the disallowance of interest u/s.14A(1) r/w r. 8D(2)(ii). We, accordingly, consider it a serious lapse on the part of the ld. CIT(A) in not so directing the A.O. So much so, in our view, the parties themselves should have pointed out this during hearing, which exhibits or reflects smugness on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' on 25.03.2008, i.e., during the previous year relevant to A.Y. 2008-09, the immediately preceding assessment year, at ₹ 1,50,000/-. The same attracts section 50C. The value adopted by the stamp value authority was at ₹ 2,30,000/-. He, accordingly, recomputed the opening WDV of the relevant block of assets by reducing the said sum, as 'moneys payable', and allowed the depreciation for the current year accordingly, working the same to ₹ 2,78,970/-, i.e., at ₹ 5,700/- less than that claimed by the assessee. In appeal, the assessee found favour with the ld. CIT(A) in-as-much as section 50C only applies for computing 'capital gains' arising to the assessee on the transfer of capital assets specified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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