TMI Blog2014 (3) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... t the impugned disallowance can be computed under rule 8D which was notified on 24.3.2008? - HELD THAT:- We draw support from the order of the Chennai tribunal in TVS Investments Ltd. [ 2013 (1) TMI 786 - ITAT CHENNAI] to hold that rule 8D could not have been invoked for computing the disallowance from 1.4.2007 to 23.3.2008 inspite of being applicable with effect from assessment year 2008-09. That being the case, we proceed to make disallowance u/s 14A by reasonable computation and deem it fit that lumpsum disallowance of ₹ 35 lakhs would meet the ends of justice. Accordingly, the assessee s arguments are partly accepted. Disallowance/addition of expenditure incurred towards current repairs - HELD THAT:- As in assessment year 2004-05, this issue had arisen in assessee s own case which was remanded back to the AO. On a query being put up by the bench, it informs us that the Assessing Officer is yet to pass consequential order. In these circumstances, by following the order of the tribunal for assessment year 2004-05, we restore this issue also to the file of AO for decision afresh after giving adequate opportunity of hearing to the assessee. This ground is accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 14A r.w.r 8D of a sum of ₹ 97,78,639, expenses of ₹ 35,87,594/- towards current repairs and software expenditure of ₹ 78,67,240/-. 4. In assessee s appeal, the CIT(A) has partly accepted its contentions. Qua the issues of foreign exchange and telecommunication expenses, the action of the Assessing Officer stands overruled whereas the other disallowances/additions aforesaid stand confirmed. It is in this backdrop of facts, both parties are aggrieved and in appeal. 5. Since the first two grounds raised by the assessee regarding expenses incurred in foreign exchange and telecommunication and their exclusion from export turnover as well as the Revenue s sole ground (supra) are inter-related, we take up the same together for disposal. 6. We find from the assessment order that the Assessing Officer noticed the assessee not to have excluded foreign currency and telecommunication charges from its export turnover. The assessee s plea was that if it was necessary to do so, the same also deserved to be excluded from total turnover as well in view of the special bench decision of the Chennai tribunal in case of ITO vs Saksoft Ltd, 121 TTJ (Chennai) 865. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of computing deduction u/s 10A and 10B of the Act. 9.3 The AO has also mentioned in the Asst.order that the decision rendered by the Special Bench of Hon'ble ITAT, Chennai in the case of ITO vs. M/s. Saksoft Ltd. (2009) 121 TTJ Chennai (SB 865) wherein it was held that on the basis of Parity Principles, whatever has been excluded from export turnover shall also be excluded from the total turnover, was not accepted by the department and hence in order to maintain consistency with that of the stand taken in the yester years, the AO has excluded the expenditure incurred towards telecommunication charges from the export turnover only. 9.4 Since the Special Bench decision of the Hon'ble ITAT, Chennai which is directly on the issue involved in this ground, respectfully following the same as per the principles of judicial discipline, I hereby direct the AO to exclude the telecommunication expenses of ₹ 71,05,131/- Chennai unit - II and ₹ 81,43,764/- in the Bangalore strategic business Unit from the total turnover as well. This ground of appeal is allowed. A perusal of the aforesaid findings makes it clear that whatever was argued by the assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, we proceed to make disallowance u/s 14A by reasonable computation and deem it fit that lumpsum disallowance of ₹ 35 lakhs would meet the ends of justice. Accordingly, the assessee s arguments are partly accepted. 12. The next ground raised by the assessee pertains to disallowance/addition of expenditure incurred towards current repairs. 13. During scrutiny, the Assessing Officer came across expenses of ₹ 5,87,594/- claimed to have been incurred in replacing the flooring tiles, civil works in toilets, erecting dry wall partition, false ceiling and renovation in the leasehold premises. He made disallowance by placing on record the assessments of assessment years 2006-07 and 2007-08 wherein the very expenses had been held to be capital in nature. 14. The CIT(A) has also maintained the findings of the Assessing Officer. 15. Before us, the assessee places on record copy of order of the tribunal in I.T.A. No. 480/Mds/2008, dated 31.9.2009, to contend that in assessment year 2004-05, this issue had arisen in assessee s own case which was remanded back to the Assessing Officer. On a query being put up by the bench, it informs us that the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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