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TMI Blog2016 (8) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... , (iv) Rate and Taxes: Rs. 3,000/- and (iv) Bank Charges : Rs. 63,005/- on proportionate basis, holding that the same were incurred for the purposes of earning income by way of rent. He failed to appreciate that the said expenses were incurred for the purposes of the business of the Appellant; 3. That the Commissioner (Appeals) erred in confirming the disallowance of depreciation of Rs. 3,84,684/-. He erred in holding that there was no justification for capitalizing the proportionate lease rent for the area used for the installation of the Plant & Machinery to the block of. Plant & Machinery; 4. That the conclusions and inferences of the Assessing Officer and/or Commissioner (Appeals) are based on suspicions, conjectures, surmises and extraneous and irrelevant considerations; 5. That the reliefs prayed for may kindly be allowed and the order(s) of the Assessing Officer and/or Commissioner (Appeals) may kindly be quashed, set aside, annulled or modified; 6. That the aforesaid Grounds of Appeal are without prejudice to each other; 7. That the Appellant craves leave to vary, alter, amend or add to the aforesaid Grounds of Appeal before or at the time of hearing of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to plant & machinery used for maintenance and services at Rs. 3,14,33,917/-, after considering the depreciation already claimed by the assessee. Further, considering the addition of asset during the year amounting to Rs. 4,76,696/-, the allowable depreciation to the assessee for its business income was computed at Rs. 79,77,653/- and since the assessee had claimed depreciation of Rs. 1,10,06,901/-, made a disallowance of Rs. 30,29,247/-. 6. Apropos first issue regarding allocation of common expenses, ld. CIT(A) allowed the assessee's claim as regards the professional fees paid to M/s Knight Frank (India) Pvt. Ltd. being services charges paid to them. However, he upheld the AO's action in appropriating the expenses relating to audit fees, travel and conveyance, rates and taxes and bank charges between rental income and service income. 7. Apropos the issue relating to depreciation, ld. CIT(A) confirmed the AO's action to the extent of disallowance of depreciation claimed by assessee relating to capitalized lease rent on the ground that the plant & machinery was installed at that part of the land and, therefore, the lease rent relatable to that part of the land had to be capitaliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L A/c. Therefore, AO as well as ld. CIT(A) were justified in proportioning this expenditure. 16. The second item is regarding accounting and legal charges. Before ld. CIT(A) the assessee had pointed out that accounting charges amounting to Rs. 1,74,775/- were paid to M/s Perfect Accounting System for writing the books for the year. Therefore, this had to be allocated between rental income and service income, because rental income has also been accounted for in the books of a/c. 17. As far as legal charges amounting to Rs. 1,22,649/- are concerned, before ld. CIT(A) the assessee had pointed out that the amount was paid to Associates Law Advisors, but it is not pointed out for which purpose the amount was paid. Therefore, both the lower revenue authorities rightly allocated this expenditure between rental income and service income. 18. As far as travel & conveyance expenses are concerned, we find that before ld. CIT(A) the assessee had pointed out that this amount was expense on day to day travelling of the officials of Knight Frank for maintenance and operation of common area. Therefore, this amount was directly attributable to the service income derived by assessee and hence cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses of Rs. 16,30,2211- for (i) Auditors Remuneration : Rs. 55,1001-, (ii) Legal and Professional Expenses : Rs. 15,40,509/-, (iii) Travel and Conveyance: Rs. 12,0601- and (iv) Rate and Taxes: Rs. 22,552/- on proportionate basis, holding that the same were incurred for the purposes of earning income by way of rent. He failed to appreciate that the said expenses were incurred for the purposes of the business of the Appellant; 3. That the Commissioner (Appeals) erred in. confirming the disallowance of depreciation of Rs. 2,88,513/- . He erred in holding that there was no justification for capitalizing the proportionate lease rent for the area used for the installation of the Plant & Machinery to the block of Plant & Machinery; 4. That the conclusions and inferences of the Assessing Officer and/or Commissioner (Appeals) are based on suspicions, conjectures, surmises and extraneous and irrelevant considerations; 5. That the reliefs prayed for may kindly be allowed and the order(s) of the Assessing Officer and/or Commissioner (Appeals) may kindly be quashed, set aside, annulled or modified; 6. That the aforesaid Grounds of Appeal are without prejudice to each other; 7. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi, - dated 08.11.2013, is wrong on facts and bad in law; 2. That the Commissioner (Appeals) erred in confirming the disallowance of expenses of Rs. 1,01,401/- out of the total expenses of Rs. 1,23,4461- for (i) Auditors Remuneration: Rs. 56,1201-, (ii) Legal and Professional Expenses: Rs. 57,9861-, and (iii) Travel and Conveyance: Rs. 9,3401- on proportionate basis, holding that the same were incurred for the purposes of earning income by way of rent. -He failed to appreciate that the said expenses were incurred for the purposes of the business of the Appellant; 3. That the Commissioner (Appeals) erred in confirming the disallowance of depreciation of Rs. 1,29,8311- . He erred in holding that there was no justification for capitalizing the proportionate lease rent for the area used for installation of Plant & Machinery to the Block of Plant & Machinery; 4. That the Commissioner (Appeals) erred in confirming the disallowance of additional depreciation of Rs. 2,72,122/-; 5. That the Commissioner (Appeals) erred in confirming the charging of interest under Sections 234B of the Act; 6. That the conclusions and inferences of the Assessing Officer and/or Commissioner (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing [ or in the business of generation or generation and distribution of power], a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) : 44. Bare perusal of the said section makes it clear that the basic ingredient of the section is that the assessee should be engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power. Admittedly, the assessee was not at all engaged in the generation or generation and distribution of power but had only installed DG set for providing electricity to the tenants at the time of power failure. The term 'or in the business of generation or generation and distribution of power' was inserted by the Finance Act, 2012 w..e.f. 1.4.2013. Prior to that the requirement was that the assessee should have been engaged in the business of manufacture or production of any article or thing. We fail to appreciate what article or thing the assessee produced so as to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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