TMI Blog2019 (4) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... eatment of the same as the above item credited to the profit and loss account is merely book adjustment by which the profit in the books of account have gone up and as it does not have any tax impact, same is correctly reduced from the taxable income of the assessee. It has nothing to do with the claim of the depreciation on assets which is terms of the provision of section 32 of the Income tax Act. Hence we reverse the finding of the lower authorities and direct the AO to delete the disallowances - Decided in favour of assessee Addition u/s 14A r.w.r.8D - disallowance of interest and indirect expenses - HELD THAT:- Assessee has made investment in shares and mutual funds income of which is exempt from tax. It is also apparent that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation under the Income Tax Act law stands on different footing with the claim of the depreciation in the books of account. 3. That the order passed by the Assessing Officer and confirmed by the ld CIT (A) is bad in law. 4. That the disallowance of ₹ 29,91,405/- made by the Assessing Officer and upheld by the CIT(A) is bad in law. 5. That the CIT(A) failed to consider the detailed submissions and has passed order in a casual manner to confirm the disallowance. 6. That the disallowance u/s 14A read with Rule 8D is not as per the provisions of these sections/ rules and is bad in law. 3. The brief facts of the case is that the assessee is a company who filed its return of income on 30/09/2011 declaring loss of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten back in the books of account as per audited balance sheet of the assessee because of the reason that there was a change in the method of providing of depreciation from written down value method to straight line method. As a result there was a difference of depreciation provided up to the beginning of the year on the written down value method now changed to straight line method of ₹ 19610677/-. Same was credited to the profit and loss account of the assessee and therefore the same was reduced in the computation. He submitted that this adjustment is book entry as per the guidance note of the ICAI on change in method of Depreciation and its accounting treatment. He therefore submitted that same cannot be added or disallowed by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee are allowed. 10. Ground No. 4 to 6 of the appeal are against the disallowances of ₹ 2991405/- u/s 14A of the Act. It is found that assessee has invested in shares and mutual funds and therefore, the ld AO issued notices to the assessee as to how the interest and expenditure attributable to the investment of ₹ 50367218/- made in the shares and mutual funds. AO notes that assessee has secured loan of ₹ 51.28 cross and unsecured loan of ₹ 28.46 lakhs . The assessee submitted its reply resisting the disallowances. However, the ld AO invoked the provisions of section 14A of the Act and made disallowances of ₹ 2991405/- under Rule 8D of the Income Tax Rules 1962 under section 14A of the Act. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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