TMI Blog2021 (8) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment for A.Y. 2009-10, as on date, does no more survive any more, therefore, the disallowance of the assessee s claim for depreciation on fixed assets, viz. civil work of factory building executed by M/s Teracon Construction (I) Pvt. Ltd. for the year under consideration i.e A.Y 2012-13 also cannot be sustained. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, as the facts and the issue pertaining to the disallowance of the interest expenditure U/rule 8D(2)(ii) during the year under consideration remains the same as were there before the Tribunal in the assessee s own case for A.Y. 2009-10, therefore, we respectfully follow the view therein taken and vacate the disallowance of the interest expenditure. As pursuant to the judgment of Maxopp Investment Ltd. Vs. CIT [ 2018 (3) TMI 805 - SUPREME COURT] as the dominant purpose for which the investment into shares is made by an assessee may not be relevant, therefore, the claim of the assessee that no administrative expenses could be attributed qua the investments made by the assessee in its wholly owned subsidiary company cannot be accepted. But then, as it is a matter of fact borne from the record that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount of (-) ₹ 59,28,12,390/- after making the following disallowances: Sr. No. Particulars Amount 1. Disallowance of the assessee s claim for depreciation ₹ 2,28,26,405/- 2. Disallowance u/s 14A ₹ 23,79,327/- 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). It was observed by the CIT(A) that the disallowance of the assessee s claim for depreciation pertained to the opening written down value (W.D.V) of its fixed assets . Referring to the observations that were recorded by his predecessor while disposing off the assessee s appeal for A.Y 2009-10, vide his order No. IT-390/14-15, dated 14.11.2014 for A.Y 2009-10, it was observed by the CIT(A), as under : (i). that the assessee company had awarded to M/s Teracon Construction (I) Pvt. Ltd civil works contract for construction of its three units, viz. (i). Unit at Kinauni for particle board; (ii) Unit at Palia for MDF Board; and (iii). Unit at Kunderki for MDF Board; and had capitalized a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessment for A.Y 2009-10 had been restored by the Tribunal to his file for fresh adjudication, and the same was pending as on date, therefore, the very basis for making the disallowance did no more survive. Accordingly, he followed the view that was taken by his predecessor while disposing off the assessee s appeal for A.Y. 2009-10, and directed the A.O to vacate the disallowance of the assessee s claim for depreciation of ₹ 2,28,26,405/- on fixed assets. 5. We have heard the Ld. Authorized Representatives for both the parties qua the aforesaid issue under consideration and have perused the orders of the lower authorities as well as the material available on record. As is discernible from the record, the disallowance of the assessee s claim for depreciation during the year under consideration i.e A.Y 2012-13 was made as regards the opening W.D.V of the fixed assets, viz. civil work of factory building executed by Teracon Construction (I) Pvt. Ltd. As noticed by us hereinabove, the genesis of the controversy in hand finds its roots in A.Y 2009-10, wherein the A.O questioning the genuineness of the assessee s claim of having executed the civil work of factory bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pending adjudication, therefore, now when the very basis for making the impugned disallowance of the assessee s claim for depreciation during the year under consideration i.e A.Y. 2012-13 does no more survive or ceases to be in existence, no infirmity could therein be related to the order of the CIT(A) who had rightly vacated the aforesaid disallowance of ₹ 2,28,26,405/- (supra). Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. The Ground of appeal No. I raised by the revenue is dismissed. 6. We shall now take up the claim of the revenue that the CIT(A) had erred in vacating the disallowance u/s 14A of ₹ 23,79,327/- made by the A.O. As is discernible from the records, it was observed by the A.O that though the assessee held exempt income yielding shares of ₹ 5 crore on 31.03.2011 and 31.03.2012, however, it had not offered any disallowance u/s 14A of the Act. On being queried as to why the disallowance may not be worked out u/s 14A of the Act, it was submitted by the assessee that as the aforesaid investments of ₹ 5 crores in shares of its subsidiary companies, viz. M/s Bajaj Aviation Pvt. Ltd. were made on 31.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order passed by his predecessor while disposing off the assessee s appeal for A.Y. 2009-10 wherein the disallowance made by the A.O u/s 14A r.w. Rule 8D was vacated in toto had thereafter been upheld by the Tribunal, vide its order passed in ITA No. 948/Mum/2015, dated 08.11.2017. Backed by his aforesaid observations, the CIT(A) was of the view that as the facts and the issue involved in the year under consideration i.e A.Y. 2012-13 remained the same, therefore, following the view that was taken by his predecessor in the assessee s case for A.Y. 2009-10, he directed the A.O to vacate the disallowance that was made by him u/s 14A r.w. Rule 8D. 8. We have deliberated at length on the aforesaid observations of the CIT(A) qua the deletion of the disallowance made by the A.O u/s 14A r.w. Rule 8D. Admittedly, as the facts and the issue pertaining to the disallowance of the interest expenditure U/rule 8D(2)(ii) during the year under consideration remains the same as were there before the Tribunal in the assessee s own case for A.Y. 2009-10, therefore, we respectfully follow the view therein taken and vacate the disallowance of the interest expenditure. At the same time, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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