TMI Blog2019 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier years prior to assessment year 2002-03 while computing its income under the 1961 Act. The AO has now taken into account depreciation which would have been allowable u/s 32 but was not claimed by the assessee while computing its written down value of the assets and income for all those years. We have observed that the tribunal while adjudicating appeal for AY 2012-13 in assessee s own case followed the decision in assessee s own case in Plastiblends India Ltd., v Addl. CIT [ 2017 (10) TMI 423 - SUPREME COURT] . In order to maintain consistency as laid down by Hon ble Supreme court in the case of Radhasoami Satsang v. CIT [ 1991 (11) TMI 2 - SUPREME COURT] we decide the issue against the assessee by following the above said decision of the tribunal in assessee s own case for immediately preceding assessment year 2012-13. - I.T.A. No.5426/Mum/2017 - - - Dated:- 30-1-2019 - Shri Pawan Singh, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri. Gautam A Thacker For the Revenue : Shri. D.G Pansari (DR) ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exempt income by invoking provisions of Section 14A of the 1961 Act r.w.r. 8D(2)(iii) of the Income-tax Rules, 1962. The assessee had received an amount of ₹ 25,56,845/- as dividend income which was claimed as an exempt income u/s. 10(34) of the 1961 Act. The assessee had offered ₹ 35,158/- as disallowance u/s. 14A of the Act with respect to earning of an exempt income. The AO had made disallowance u/s. 14Aof the 1961 Act r.w.r. 8D(2)(ii) and 8D(2)(iii) of the 1962 Rules, as under:- Thus, the AO made total disallowance of ₹ 10,96,588/- (₹ 11,31,746/- - 35,158/-) which was added back to the income of the assessee being expenditure incurred in relation to earning of an exempt income , vide assessment order dated 09.02.2016 passed by the AO u/s 143(3) of the 1961 Act. 4. The issue travelled to Ld. CIT(A) at the behest of the assessee who was pleased to delete the addition of ₹ 9,49,286/- as was made by the AO u/s. 14A of the 1961 Act r.w.r. 8D(2)(ii) of the 1962 Rules , vide appellate order dated 30.05.2017. It is not brought to our notice both by learned DR as well learned counsel for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of disallowance by the assessee. It is an undisputed fact that investment is a policy decision taken by the Board of Directors at the highest level which requires lot of consultancy from various experts. Therefore, the disallowance u/s. 14A r.w. Rule 8D(2)(iii) becomes imperative, as the disallowance have been computed by the AO as per the applicable provisions of law. We do not find any reason to interfere with the disallowance. Facts being identical, we follow the above order of the Co-ordinate Bench and uphold the order of the Ld. CIT(A) 6. The Ld. DR raised no objection if the issue is decided against the assessee. 7. We have heard rival contentions and perused the material on record. We have observed that the assessee is engaged in the business of manufacturing of master batches, compound of plastic extrusion industry. We have observed that the disallowance has been upheld by Ld. CIT(A) u/s. 14A of the 1961 Act r.w.r. 8D(2)(iii) of the 1962 Rules to the tune of ₹ 1,82,460/- less ₹ 35,158/- suo motu offered by the assessee. The issue for earlier year(s) has travelled to tribunal and the tribunal was pleased to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT reported in (2018) 402 ITR 640(SC) has rejected the dominant purpose theory for invoking provisions of Section 14A of the 1961 Act and hence the contention of the assessee that shares were held as strategic investments on which exempt income by way of dividend was earned and hence provisions of Section 14A cannot be invoked lacks merit in view of aforesaid decision of Hon ble Supreme Court in the case of Maxopp Investment Limited(supra). We order accordingly. 8. The next issue concerns itself to a depreciation which was not claimed by the assessee in earlier assessment years prior to AY 2002-03 as the assessee opted not to claim depreciation for those years for its three divisions namely Division I, II and III of Factory 1 2. The AO revised written down value of the assets by taking into account depreciation as were allowable under the 1961 Act for years prior to AY 2002-03 albeit the same was not claimed by the assessee in return of income filed with the Revenue for all those years. This led to the additions to the tune of ₹ 8,38,581/- by the AO and later the Ld. CIT(A) was also pleased to dismiss the appeal of the assessee by holding as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. **** 3. The Ld. counsel of the assessee fairly agrees that the 1st ground of appeal has been decided against the assessee by the decision of the Hon ble Supreme Court in assessee s own case i.e. Plastiblends India Ltd. v. Additional CIT (2017) 86 taxmann.com 137 (SC). The Ld. DR relies on the above decision. 4. We have heard the rival submissions and perused the relevant materials on record. In the above decision, it has been held that quantum of deduction under section 80-IA is not dependent upon assessee claiming or not claiming depreciation, because under section 80-IA quantum of deduction has to be determined by computing total income from business after deducting all deductions allowable under sections 30 to 43D of the Act. Following the above decision, we uphold the order of the Ld. CIT(A). 11. We have observed that the tribunal while adjudicating appeal for AY 2012-13 in assessee s own case followed the decision of Hon ble Supreme Court in assessee s own case in Plastiblends India Ltd., v Addl. CIT reported in (2017) 86 taxmann.com 137(SC). In order to maintain consistency as laid down by Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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