TMI Blog2021 (10) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the amount equal to 1% of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income, shall be disallowed. Therefore, post 02/06/2016, the plea to exclude the non-income yielding investment is to be rejected. Though the assessee has identified direct expenses towards earning of exempt income but it has not made any disallowance of indirect expenditure - application of Rule 8D would not be automatic or mechanical and the disallowance has to be computed having regards to the accounts of the assessee - disallowance u/s. 14A r.w.r. 8D stand restored to the file of Ld. AO for de novo adjudication in the light of our ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manoj Kumar Aggarwal, Accountant Member 1. Aforesaid appeal by assessee for Assessment Year (A.Y.) 2016-17 arises out of the order learned Commissioner of Income-Tax (Appeals)-49, Mumbai [CIT(A)], dated 24/01/2020 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s. 143(3) r.w.s. 147 on 28/12/2018. The effective grounds read as under:- 1. The Ld. Commissioner of Income-tax (Appeals) ('CIT(A)') has erred in making disallowance under section 14A read with rule 8D of the Income-tax Rules, 1962 2. The Ld. Commissioner of Income-tax (Appeals) erred in not treating the one time membership entrance fees as capital receipt. 3. The learned Commissioner of Income-tax (Appeals) erred in confirming the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has recorded such satisfaction and thereafter computed the disallowance u/r. 8D. Therefore, this plea is to be rejected. 2.3. Another argument is that while computing the disallowance, only those investments are to be considered which have yielded exempt income during the year. This plea is also to be rejected since after amendment to Rule 8D w.e.f. 02/06/2016, the computation u/r. 8D has undergone change and it has been made clear that the amount equal to 1% of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income, shall be disallowed. Therefore, post 02/06/2016, the plea to exclude the non-income yielding investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing, chemical coating etc. The aluminum sheets are for the purpose of window replacement etc. Similar is the nature of other expenses. All these expenses, in our opinion, are not capital expenditure by which the assessee has acquired any new assets but the same are more in the nature of repair renovation expenses. The benefit may be enduring in nature but nevertheless, the expenditure could not be termed as capital expenditure. Similar is the view of Tribunal in assessee's own case for A.Y. 2009-10, ITA No. 2093/Mum/2013 order dated 21/12/2017. Therefore, we direct Ld. AO to allow the same as revenue expenditure and reverse the depreciation granted on these items. This ground stand allowed. 4. The appeal stand partly allowed in te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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