TMI Blog2013 (5) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Apex Court in Civil Appeal No.7593 of 2009 arising out of Special Leave Petition No.3854/Mds/08. Appeal for assessment year 2008-09 is on an order of the CIT(A) against an assessment done on the assessee u/s 143(3) of the Act. 3. One common issue that runs through both these appeals is regarding replacement of machinery. Assessee, a manufacturer of cotton yarn and processed fabrics, had during the previous year relevant to assessment year 2005-06 replaced the following machineries: 1. Autoconers (2 Nos.) ₹ 2,26,94,962 2. LD. A.R 6 Ring Frame (10 Nos) ₹ 2,40,28,735 3. Compact Drafting system (8 Nos) &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of an item should be looked from the point of view of the provisions of the Act. 6. Per contra, the CIT/DR supported the orders of the ld. CIT(A). 7. We have perused the orders and heard the rival submissions. It is not in dispute that the assessee had during the previous years relevant to assessment years under consideration, replaced items like Autoconers, LD. A.R 6 Ring Frame and Compact Drafting System, Lap Centres and Combers. Ld.CIT(A) had allowed the claim of the assessee in so far as it related to multi drum filters finding such item to be only current repairs. Expenditure admittedly was incurred for replacement, and these were capitalized by the assessee in its books of account. These could have been considered as repai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee had, during the relevant previous year, received dividend income of ₹ 64,20,704/- which included dividends received from a subsidiary company called M/s Benwood Corporation. Assessing Officer, by applying section 14A of the Act r.w. Rule 8D of the Income-tax Rules, disallowed ₹ 10,90,875/-. 10. In its appeal before the ld. CIT(A), argument of the assessee was that substantial part of the dividend income was received from M/s Benwood Corporation, a subsidiary company of the assessee situated abroad, and such dividend was never claimed by it as exempt income. Ld. CIT(A) appreciated this contention of the assessee. He directed the Assessing Officer to re-work the disallowance excluding the sum of ₹ 6,16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of Maxopp Investment Ltd Ors (supra) has held that if an assessee had made a claim regarding no expenditure or some specific amount of expenditure, to have been incurred for the purpose of earning dividend income, then it was necessary for the Assessing Officer to give a finding whether the claim was correct or not. Considering all these aspects, we are of the opinion that the matter requires a fresh look by the Assessing Officer. We, therefore, set aside the orders of the authorities below and remit the issue regarding disallowance u/s 14A back to the file of the Assessing Officer for consideration afresh in accordance with law. 14. In the result, the appeal of the assessee for assessment year 2005-06 is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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