TMI Blog2017 (4) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- CIT(A) correctly having examined the Certificate dated 31st March, 2008 given by the Chartered Engineers held that the assessee rightly claimed depreciation @ 80% on these devices. Claim of depreciation on building given on rent - Held that:- CIT(A) has given a specific direction to the AO to examine the accounts and arrive at a finding after verification. The learned CIT(A) has not allowed the claim of depreciation of ₹ 1,06,53,231/- as made out in the 4th ground of appeal of the revenue. Therefore, the 4th ground of appeal filed by the revenue is dismissed. Allowability of interest in respect of capital WIP - Held that:- CIT(A) has not allowed the interest pertaining to capital WIP as made out in the 5th ground of appeal. Rather the learned CIT(A) has given a specific direction to the AO to examine the accounts and then arrive at a finding after verification. In view of the above, the 5th ground of appeal is dismissed. Deduction u/s 24 for repairs in respect of house property - Held that:- There is a contradiction in the version of appellant as during assessment proceedings they themselves admitted that these repair expenses are incurred for leave and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iating the fact that the server stabilizers cannot be treated as energy saving device as per the depreciation table given under Income Tax Rules. iv. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the depreciation of ₹ 1,06,53,231/- claimed on rented out buildings, without appreciating the fact that the same is not allowable under the Act and assessee has not furnished any segregation of the assets to qualify the claim of depreciation on the rented out buildings. v. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the interest of ₹ 81,55,961/- pertaining to capital WIP without appreciating the fact that the assessee has not capitalized the interest in the proportion of average capital work-in- progress to average assets and has claimed even the capital expenditure as a revenue expenses. 3. We begin with the 1st ground of appeal of the revenue. It relates to the disallowance of prior period expenses of ₹ 10,70,534/- by the Assessing Officer (AO). The only reasons given by the AO in disallowing the above expenses is that these relate to preceding years and hence no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,89,00,000/- as made out in the 2nd ground of appeal filed by the revenue. As the learned CIT(A) has specifically set aside the above issue to the file of the AO, the 2nd ground of appeal is dismissed. 5. The 3rd ground of appeal relates to the claim of depreciation @ 80% by the assessee on energy efficient devices. The AO found that most of the devices were servo stabilizers and quite different from automatic voltage controller. The other equipments were surge suppressors and harmonic filters . None of these are listed under clause E , which lists the electrical equipments to be treated as energy saving device in the Depreciation Table given in Income Tax Rules, 1962. Therefore, the AO allowed the depreciation at the normal rate of 15% and disallowed the balance of ₹ 13,63,746/-. On appeal, the learned CIT(A), having examined the Certificate dated 31st March, 2008 given by the Chartered Engineers held that the assessee rightly claimed depreciation @ 80% on these devices. 5.1 Having heard the rival submissions and perused the relevant material on record, we find that the learned CIT(A) after examination of the relevant Certificate has arrived at a decision. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no opportunity was given to them. On facts appellant have submitted that they have themselves capitalised the interest expenditure relating to the funds used in capital WIP account. For the same, appellant have relied upon page number 191 of paper book. I have gone through the same and noted that this is statement of interest capitalised in accounted in capital work-in-progress. The total amount of interest so capitalised is ₹ 1,91,23,990/-. I have also gone through page number 32 of annual accounts where in for the borrowing cost it has been mentioned that as they are directly attributable to acquisition, construction or production of qualifying asset, they are capitalised as a part of the cost of that asset. As appellant have already capitalised and have not debited the interest expenses in the profit and loss account, I am in agreement with appellant that same cannot be disallowed. In view of this AO is directed to look into the accounts to ascertain and satisfy himself that no such expenses have been claimed under the head interest by the appellant in the profit and loss account. Further statistical purpose ground number 8 is treated as allowed. 7.1 Having heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir letter dated 8.12.2010. In view of this I am of the opinion that appellant has switched over from their earlier stand without negating the facts that they did admit so before AO. In absence of any contradiction made to the same, I am of the view that action of AO to disallow proportionate expenses, looking into the fact that appellant have already deducted by making a claim under section 24 also, the addition made of ₹ 9,63,944/- is upheld. The ground number 7 is dismissed. 10.1 Having heard the rival submissions and perused the relevant material on record, we find that the decision of the learned CIT(A) on the above issue is based on proper appreciation of facts. No evidence could be produced by the assessee before the AO and the CIT(A) in support of the said claim. Therefore, we uphold the order of the learned CIT(A) on the above issue and dismiss the above ground filed by the assessee. 11. The assessee has filed an additional ground in respect of addition of forex derivative loss of ₹ 2,89,00,000/- by the AO. We have dismissed at para 4.1 here-in-above the corresponding ground of appeal of the revenue. Hence this additional ground filed by the assessee be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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