TMI Blog2016 (10) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer (AO)has filed the present appeal. Assessee, company,engaged in the business of construction and civil engineering, filed its return of income on 15/10/2007,declaring income at ₹ 148.79 crores.The Assessing Office(AO) completed the assessment u/s.143(3) of the Act,on 3/3/ 2013,determining the income of the assessee at ₹ 160.84 crores. 2. Effective ground of appeal is about restricting the disallowance to ₹ 4,30,550/- u/s.14A of the Act.During the course of assessment proceedings,the AO found that the assessee had claimed exempt income of ₹ 1.68 lakhs u/s. 10(34) of the Act being dividend on shares.He , vide questionnaire dated 29.12.2012,sought details of inadmissible expenses within the meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,that his predecessors,while deciding the appeasl for the AY.s. 2008-09 and 2009-10,had accepted the claim made by the assessee, that there was no proof of direct nexus of interest bearing funds in making investment,that the AO was not justified in making disallowance on account of interest expenditure.He restricted the disallowance to ₹ 4.30, lakhs following the order of his predecessor for the AY 2009-10. 2.3. During the course of hearing before us,the Departmental Representative (DR) supported the order of AO the Authorised Representative (AR) referred to the case of HDFC Bank Ltd. (ITA No330 of 2012, dt.23.7.14) of the Hon ble Bombay High Court and Joint Investments Pvt. Ltd (ITA 117/2015 ,25/2/15) of Hon ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is engaged in construction and Civil Engineering therefore it is not engaged in the business of manufacture or production of any article or thing therefore sought explanation from the assessee to justify its claim of additional depreciation. 12. The assessee filed a detailed reply giving details of various items purchased and installed under the head plant and machinery. It was explained to the AO that the assessee was granted benefit u/s. 80HH and Sec; 80-I of the Act therefore the issue relating to the activities of the assessee are settled and decided in favour of the assessee, However the AO was of the opinion that the Hon'ble Supreme Court in two decisions namely CIT Vs N.C. Buddharaj ' Co 204 ITR 412 and Builder Assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncluded that the assessee company s business activity to the extent of 15% amounts to manufacturing activities and therefore eligible for deduction of additional depreciation. 14. Aggrieved by this findings of the Ld. CIT(A) Revenue is before us. 15. The Ld. Departmental Representative strongly submitted that the assessee is not engaged in production or manufacture of any article or thing therefore it is not eligible for additional depreciation. In alternative, the Ld. DR submitted that since the Ld. CIT(A) himself has pointed 01 that only 15% of the activity of the assessee can be construed as manufacturing activity, therefore, the claim of depreciation should be restricted to only 15%. 16. Rebutting the arguments of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profession, the deduction under sub-clause (ii) of clause (a) and clause (c) of Sec. 30, clauses (i) and (ii) of Sec. 31 and clause (ii) of sub-section (1) of Sec. 32 shall be restricted to a fair proportionate part thereof which the AO may determine, having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession. If the legislative intent was to allow proportionate depreciation , it could have provided similar restriction for the claim of depreciation while inserting the claim of additional depreciation as provided u/s. 32(1)(iia) of the Act and therefore in the light of the provisions of Sec. 32[1 ] (iia), there is no mandate of law to restrict the allowance of depreciation proport ..... X X X X Extracts X X X X X X X X Extracts X X X X
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