TMI Blog2017 (8) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... of investment the assessee requested for setting aside the issue to the file of the AO for verification and restricted this disallowance to the extent of investment made in equity from where dividend income is earned and excluded the investment wherein dividend is earned on growth of funds. On this the learned Sr. DR has not objected. We find the plea of the assessee is reasonable and we restore this issue back to the file of the AO Disallowing the depreciation on capital equipments i.e. Wind Energy Generators and Accessories - Held that:- assessee purchased 2 (two) Enercon make 800 KW type E-48 wind energy converters and accessories to be installed at site. The installation work was to be completed by 31-12-2006 but there was delay of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 hereinafter the Rules. 3. Briefly, stated facts are that the AO during the course of assessment proceedings noticed that the assessee has earned dividend income of ₹ 51,60,998/- and claim the same as exempt under section 10(34) of the Act. The AO also noticed that the assessee has worked out disallowance under section 14A of the Act at ₹ 3,57,258/- in the return of income. The assessee has also paid interest on borrowed funds for a total out the interest as per Rule 8D of the Rules and he submitted the working of interest as per Rule 8D(2)(ii) at ₹ 22,32,480/- but stated that the same cannot be allowable because it relates to cash credit and current account loans. The AO worked out the disallowance to Rule 8D(2) (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered by the decision of the Hon ble Bombay High Court in the case of HDFC Bank Ltd. (Supra) and hence, this issue is decided in favour of assessee. 5. As regards, the disallowance of 0.5% of the average value of investment, the learned Counsel for the assessee drew our attention to schedule of investment i.e. investment in growth funds as well as equity. According to him, the investment in growth funds should be excluded for computation of disallowance and he relied on the decision of Everest Kanto Cylinder Ltd. vs ACIT (2015) 167 TTJ (Mumbai) 204, wherein the issue is set aside to the file of the AO to delete the disallowance in respect to the investment made in mutual funds with growth schemes. The learned Counsel for the assessee dre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 43(1) of the Act, the reduction of ₹ 16,40,480/- made therefrom on account of such wrong holding, is unwarranted and unjustified and so is the confirmation thereof by the learned Commissioner of Income-tax (Appeals). 8. Briefly stated facts are that the AO, in view of the assessee letter dated 17-11-2011, disallowed the loss to the extent of ₹ 20,50,600/- terming the same as capital receipt being the same received on account of liquidated damages on late delivery of capital equipments i.e. Wind Energy Generators and Accessories. The AO was of the view that the assessee is not eligible for the claim of depreciation at 80%. Accordingly, he worked out the disallowance at ₹ 16,40,480/-. Aggrieved assessee preferred the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mages. In response to the remand report, the appellant contended that the liquidated damages cannot be reduced from the total cost for the purpose of depreciation claim and the appellant is entitled for full depreciation. After carefully taking into account the submissions of both the parties, it is concluded that the view of the Assessing Officer is correct and the effective cost for the appellant is only the finally settled price on the purchase of machinery. Since the liquidated damages were paid by the supplier as against the delay in the machinery delivered, the effective cost of machinery is the final price which is the total cost of the machinery as reduced by the liquidated damages paid and accordingly the appellant is entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 16,40,480/- on wrong premises. We delete the addition and allow this appeal of the assessee on this issue. 10. The next appeal of the assessee is against the order of CIT(A) confirming the disallowance of claim of deduction under section 80IA of the Act. For this assessee has raised following ground No. 4: - 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the actin of the Assessing Officer in taking the year of installation of windmill as the initial assessment year for computing profit and gains of the eligible business for the purpose of calculating deduction under section 80IA (I) instead of taking the same as adopted by the appellant as per the option provided in section 80IA(2) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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