DCIT, New Delhi V. Delphi Automotive Systems Pvt. Ltd., New Delhi

ITA 2024/DEL/2013

• Counselvise Citation: 202420114 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-07-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Depreciation; Initiation of penalty proceedings; Wholly owned subsidiary; Revised return; Revenue expenditure
• Section: 32; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI I.C.SUDHIR, J.M. AND SHRI J.SUDHAKAR REDDY, A.M. ITA NO. 2024 /DEL/2013 ASSESSMENT YEAR : 200 2 - 03 DCIT, CIRCLE 10(1) VS. DEL P HI AUTOMOTIVE SYSTEMS P.LTD. NEW DELHI B 92, HIMALAYA HOUSE, 23, KG MARG NEW DELHI PAN: AAACD 0226 E ITA NO. 1476 /DEL/2013 ASSESSMENT YEAR : 200 2 - 03 DELHI AUTOMOTIVE SYSTEMS PVT.LTD. VS. DCIT, CIRCLE 10(1) NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY: - SH. GAGAN KUMAR, C.A. DEPARTMENT BY: - SMT.PARWINDER KAUR, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS AND ARE DIRECTED AGAINST THE ORDER OF THE LD.CIT(APPEALS) - V, NEW DELHI DT. 10.01.2013. 2. THE ASSESSEE IS A WHOLLY OWNED SUBSIDIARY OF M/S DELPHI AUTOMOTIVE SYSTEMS (HOLDING) INC. INCORPORATED IN USA. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF AUTOMOTIVE COMPONENTS SUCH AS DRIVE SHAFTS, INTEGRATED WRITING HARNESSES, CATALYTIC CONVERTERS, HEATING, COOLING AND VENTILATING SYSTEMS AND SUSPENSION SYSTEMS. HE FILED HIS RETURN OF INCOME ON ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 2 OF 10 31.10.2002 DECLARING LOS S OF RS.7,59,89,692/ - . A REVISED RETURN OF INCOME WAS FILED ON 28.11.2003. 3. WE FIRST TAKE UP THE ASSESSEE S APPEAL WHICH IS ON THE FOLLOWING GROUNDS. 1 . THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDERS PASSED BY THE LD. A.O AND THE CIT(A) ARE ERRONEOUS AND BAD IN LAW, TO THE EXTENT MENTIONED IN THE BELOW MENTIONED GROUNDS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 350 OF THE INCOME TA X ACT, 1961 (ACT) OF RS. 8,00,090 BEING 1/10 TH EXPENDITURE INCURRED IN INCREASING THE AUTHORIZED CAPITAL FOR THE PURPOSES OF EXPANSION OF THE INDUSTRIAL UNDERTAKING. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN R ESTRICTING THE RELIEF TO RS. 10,85,326/ - BEING 1I5THOFTOTAL EXPENDITURE OF RS. 54,26,627/ - THUS CONFIRMING THE DISALLOWANCE OF PRODUCT DEVELOPMENT EXPENSES OF RS. 43,41,301/ - BEING 4/5 TH . 4. (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW L D. CIT (A) ERRED IN DISALLOWING THE DEPRECIATION OF RS. 1,10,34,314 ON THE FIXED ASSETS. (B)THE LD.AO ERRED IN DISALLOWING THE DEPRECIATION OF RS. 1,10,34,314/ - ON THE FIXED ASSETS UTILIZED FOR MANUFACTURE OF COMPONENTS FOR DAEWOO MOTORS LTD, BY STATING T HAT THE VALUE OF ASSETS HAS BEEN IMPAIRED AND THUS WERE 'NOT USED' DURING THE RELEVANT YEAR. (C) FURTHER, THE LD. AO ERRED IN NOT APPRECIATING THAT UNDER THE BLOCK OF ASSETS CONCEPT THE CLAIM OF DEPRECIATION IS ON THE WRITTEN DOWN VALUE OF THE BLOCK OF AS SETS AND NOT ON THE INDIVIDUAL ASSETS. (D) THE LD. AO AND THE LD. CIT (A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSETS IN QUESTION WERE 'READY FOR USE' AND HENCE SQUARELY APPLICABLE FOR THE PURPOSE OF OBTAINING DEPRECIATION UNDER SECTION 32 OF THE A CT. (E) THE CIT(A) ERRED IN DIRECTING THAT DEPRECIATION IS TO BE ALLOWED AS PER THE ACT, TAKING INTO ACCOUNT THE WRITTEN DOWN VALUE OF THE ASSETS AS PER THE ACT, ON ACCOUNT OF THE FACT THAT IT WOULD BE ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 3 OF 10 IMPOSSIBLE TO COMPUTE DEPRECIATION IN ACCORDANCE WITH THE DIRECTIVES OF THE LD. CIT (A). 5. THE LD. A.O. WRONGLY INITIATED PENALTY PROCEEDINGS AGAINST THE APPELLANT. THE APPELLANT SUBMITS THAT INITIATION OF THE PENALTY PROCEEDINGS IS TOTALLY UNWARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 4. AFTER HEARING RIVAL CONTENTIONS WE HOLD AS FOLLOWS. 5. GROUND NO.1 IS GENERAL IN NATURE. GROUND NO.2 IS ON THE ISSUE OF ALLOWABILITY OF 1/10 TH OF EXPENDITURE U/S 35D, BEING EXPENSES INCURRED IN INCREASING THE AUTHORIZED CAPITAL FOR THE PURPOSE OF EXPA NSION OF INDUSTRIAL UNDERTAKING. THE LD.CIT(APPEALS) IN HIS CONCLUSIONS AT PARA 5.1 PAGE 8 OF HIS ORDER, DID NOT TAKE INTO CONSIDERATION THE DECISIONS OF THE ITAT IN THE CASE OF PEPSICO HOLDINGS VS. DCIT IN ITA NO.1226/DEL/2003 AS WELL AS THE JUDGEMENT O F THE HON BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. MULTI METALS LTD., REPORTED IN 118 ITR 151 (RAJ.), WHICH WAS SPECIFICALLY RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. NO REASON IS GIVEN BY THE LD.CIT(APPEALS) AS TO WHY HE IS NOT ALLOWING THESE DECISIONS OF THE JURISDICTIONAL TRIBUNAL. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF H BENCH OF THE DELHI ITAT IN ITA 5990/DEL/12 IN THE CASE OF M/S TULIP INVESTMENTS LTD. VIDE ORDER DT. 26.4.2013. IN THIS DE CISION THE COORDINATE BENCH OF THE TRIBUNAL HELD AS FOLLOWS. AS REGARDS THIRD GROUND REGARDING EXPENDITURE FOR THE PURPOSE OF INCREASE IN AUTHORIZED CAPITAL IT IS OBSERVED THAT HON BLE SUPREME COURT IN THE CASE OF CIT VS. PUNJAB STATE INDUSTRIAL CORPORATI ON LTD. HAS HELD SUCH EXPENDITURE TO BE OF CAPITAL NATURE AND HENCE NOT ALLOWABLE AS REVENUE EXPENDITURE. HOWEVER, ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 4 OF 10 HON BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. MULTI METALS LTD. (;SUPRA) HAS HELD SUCH EXPENDITURE TO BE ELIGIBLE U/S 35D(2)(C)(IV) OF THE ACT BEING ALLOWABLE AS 1/10 TH OF THE EXPENDITURE FOR A PERIOD OF TEN YEARS. THEREFORE, THE ASSESSEE CAN CLAIM ONLY 10% OF SUCH EXPENDITURE IN THIS YEAR U/S 35D. IN VIEW OF THE ABOVE, GROUND NO.3 OF THE APPEAL IS PARTLY ALLOWED TO THE EXTENT OF 10% O F RS.94,900/ - . RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THIS GROUND OF THE ASSESSEE. 6. GROUND NO.3 IS ON THE ISSUE OF PRODUCT DEVELOPMENT EXPENSES. THE ASSESSEE HAS INCURRED AN EXPENDITURE OF RS.54,26,627/ - FOR THE ASSESSMENT YEAR 1998 - 99. HE CLAIMED THE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE. THE ASSESSING OFFICER HAS TREATED THE EXPENDITURE IN QUESTION AS DEFERRED REVENUE EXPENDITURE AND ALLOWED ONLY 1/5 TH OF THE SAME FOR THE ASSESSMENT YEAR 1998 - 99. THE ASSESSEE HAS CARRIED THE MATTER IN APPE AL. FINALLY THE LD.CIT(APPEALS) VIDE HIS ORDER DT. 17.12.2002 FOR THE ASSESSMENT YEAR 1998 - 99 HAS UPHELD THE ORDER OF THE ASSESSING OFFICER THAT THE EXPENDITURE IN QUESTION IS DEFERRED REVENUE EXPENDITURE AND ONLY 1/5 TH OF THE SAME SHOULD BE ALLOWED DURIN G THE YEAR 1998 - 99. THE ASSESSEE HAS ACCEPTED THIS ORDER OF THE LD.CIT(APPEALS). 7. FOR THE ASSESSMENT YEAR 1999 - 2000 TO 2001 - 2002 THE ASSESSEE HAS NOT CLAIMED 1/5THOF THE EXPENDITURE IN ITS RETURN OF INCOME. THE BALANCE EXPENDITURE OF RS.43,41,301/ - HAS BEEN CLAIMED IN THE IMPUGNED ASSESSMENT YEAR 2002 - 03. THE ASSESSEE S CONTENTION IS THAT THE ORDER OF THE LD.CIT(APPEALS) WAS PASSED DURING THE ASSESSMENT YEAR 2002 - 03 AND HENCE THE ENTIRE EXPENDITURE IS CLAIMED IN THIS YEAR. THE REVENUE AUTHORITIES D ID NOT ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 5 OF 10 ACCEPT THE CLAIM. THE LD.CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW ONLY 1/5 TH OF THE EXPENDITURE DURING THE YEAR. AS FAR AS THE BALANCE EXPENDITURE IS CONCERNED, HE HELD THAT, HE HAS NO POWER TO GIVE DIRECTIONS FOR THE ASSESSMENT YEAR 1999 - 2000 TO 2001 - 2002. 8. AGGRIEVED THE ASSESSEE IS IN APPEAL. THE LD.COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE IS LEGAL DISPUTE GOING ON ON THE ISSUE AND UNDER THOSE CIRCUMSTANCES THE ASSESSEE IS ENTITLED TO MAKE THE ENTIRE CLAIM IN THE CURRENT YEA R I.E. THE YEAR IN WHICH THE LD.CIT(APPEALS) GAVE HIS VERDICT ON THIS ISSUE . HE RELIED ON THE FOLLOWING CASE LAWS. CITY FINANCE CONSUMER FINANCIAL SERVICES INDIA LTD. VS. CIT (DEL) 335 ITR 209 (DEL). 9. THE LD.D.R. RELIED ON THE ORDER OF THE ASSESSING OFF ICER. 10. AFTER HEARING RIVAL CONTENTIONS WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE FIRST APPELLATE AUTHORITY HAS TO BE UPHELD FOR THE FOLLOWING REASONS. THE ISSUE WHETHER THE EXPENDITURE IN QUESTION IS A DEFERRED REVENUE EXPENDITURE OR NOT, IS NOT BEFORE US. IT HAS ATTAINED FINALITY. 1/5 TH OF THE EXPENDITURE WAS ALLOWED TO THE ASSESSEE IN THE ASSESSMENT YEAR 1998 - 99. THE ASSESSEE SHOULD HAVE CLAIMED THE BALANCE IN FOUR YEARLY INSTALMENTS IN THE AYS 1999 - 2000, 2000 - 2001, 2001 - 02 AND 2002 - 03. HAVING NOT CLAIMED THE EXPENDITURE FOR THE AYS 1999 - 2000 TO 2001 - 02, DOES NOT ENTITLE THE ASSESSEE TO CLAIM DEDUCTION OF THESE FOUR YEARLY INSTALMENTS AS EXPENDITURE DURING THE CURRENT FIN ANCIAL YEAR RELEVANT TO THIS ASSESSMENT YEAR. THE EXPENDITURE IS NEITHER ACCRUED OR DUE DURING THE YEAR. THE ASSESSEE CITES LEGAL DISPUTE AS A GROUND FOR NOT CLAIMING IN ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 6 OF 10 THE SE YEARS. IN OUR VIEW SUCH AN ARGUMENT IS NOT TENABLE. THE DELHI HIGH COURT D ECISION IN THE CASE OF CITY FINANCE CONSUMER FINANCIAL SERVICES INDIA LTD. VS. CIT (SUPRA) DOES NOT SUPPORT THE CASE OF THE ASSESSEE AS IT IS ON THE ISSUE WHETHER THE TRIBUNAL WAS RIGHT IN REMANDING THE MATTER BACK TO THE FILE OF ASSESSING OFFICER. MERELY BECAUSE THE ASSESSEE HAS DISPUTED THE VIEW TAKEN BY THE ASSESSING OFFICER AND THE MATTER WAS PENDING WITH THE LD.CIT(APPEALS), IT DOES NOT LEAD TO A CONCLUSION THAT THE EXPENDITURE CAN BE CLAIMED IN THE YEAR IN WHICH THE DECISION WAS TAKEN BY THE LD.CIT(A PPEALS). IT IS NOT A DISPUTE WHICH WOULD DECIDE THE YEAR OF ACCRUAL OF LIABILITY. THE DISPUTE WAS WHETHER THE EXPENDITURE IN QUESTION WAS DEFERRED REVENUE EXPENDITURE OR REVENUE EXPENDITURE. ONCE THE ASSESSEE HAS ACCEPTED THE VIEW OF THE DEPARTMENT THAT THE EXPENDITURE IS DEFERRED REVENUE EXPENDITURE TH E N THE CONSEQUENCE IS THAT ONLY 1/5 TH OF THE EXPENSES ARE ALLOWABLE EACH YEAR. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS DISMISSED. 11. THE NEXT GROUND IS ON THE ALLOWABILITY OF DEPRECIATION ON FIXE D ASSETS. 12. THE ASSESSEE WAS MANUFACTURING AUTOMOBILE COMPONENTS AND SUPPLYING THE SAME TO M/S DEWO MOTORS ALONG WITH CERTAIN OTHER COMPANIES. M/S DAEWOO MOTORS SUS PENDED ITS MANUFACTURING OPERATIONS AND CONSEQUENTLY PLANT & MACHINERY RELATING TO MANU FACTURE OF THE COMPONENTS FOR D AE WO O MOTORS REMAINED IDLE DURING THE YEAR. THE STATUTORY AUDITOR OF THE ASSESSEE HAVE MADE CERTAIN OBSERVATIONS IN THE ANNUAL ACCOUNTS. BASED ON THESE OBSERVATIONS THE ASSESSING OFFICER AT PAGE 5 GAVE A FINDING THAT THE ASSETS WERE NOT USED FOR ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 7 OF 10 THE PURPOSE OF BUSINESS DURING THE YEAR AND HENCE THE CLAIM OF DEPRECIATION HAS TO BE DISALLOWED. 13. ON APPEAL THE FIRST APPELLATE AUTHORITY HELD THAT THE ASSESSING OFFICER WAS WRONG IN DISALLOWING DEPRECIATION ON THE ASSETS ON T HE GROUND THAT THEY WERE NOT USED. HE WAS OF THE OPINION THAT THE DEPRECIATION SHOULD BE ALLOWED ON THE WRITTEN DOWN VALUE OF THE ASSETS. AS THE ASSESSEE HAS NOT SUBMITTED THE INFORMATION DURING THE APPEAL PROCEEDINGS AND AS THE ASSESSING OFFICER HAS NOT GOT THE SAME ON RECORD, HE ALLOWED THE ALTERNATIVE PLEA OF THE ASSESSEE. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 14. ADMITTEDLY THE ASSETS IN QUESTION FORM PART OF THE BLOCK OF ASSETS. THE HON BLE DELHI HIGH COURT HAS EXPLAINED THE CONCEPT OF BLO CK OF ASSETS IN THE CASE OF OSWAL AGRO MILLS LTD. 341 ITR 467 (DEL) AS FOLLOWS. 32. IT BECOMES MANIFEST FROM THE READING OF THE AFORESAID CIRCULAR THAT THE LEGISLATURE FELT THAT KEEPING THE DETAILS WITH REGARD TO EACH AND EVERY DEPRECIABLE ASSETS WAS TIME CONSUMING BOTH FOR THE ASSESSEE AND THE ASSESSING OFFICER. THEREFORE, THEY AMENDED T HE LAW TO PROVIDE FOR ALLOWING OF THE DEPRECIATION ON THE ENTIRE BLOCK OF ASSETS INSTEAD OF EACH INDIVIDUAL ASSET. THE BLOCK OF ASSETS HAS ALSO BEEN DEFINED TO INCLUDE THE GROUP OF ASSET FALLING WITHIN THE SAME CLASS OF ASSETS. 33. ANOTHER SIGNIFICANT AN D CONTEMPORANEOUS DEVELOPMENT, WHICH NEEDS TO BE NOTICED IS THAT THE LEGISLATURE HAS ALSO DELETED THE PROVISION FOR ALLOWING TERMINAL DEPRECIATION IN RESPECT OF EACH ASSET, WHICH WAS PREVIOUSLY ALLOWABLE UNDER SECTION 32(1)(III) AND ALSO TAXING OF BALANCIN G CHARGE UNDER SECTION 41(2) IN THE YEAR OF SALE. INSTEAD OF THESE TWO PROVISIONS, NOW WHATEVER IS THE SALE PROCEED OF SALE OF ANY DEPRECIABLE ASSET, IT HAS TO BE REDUCED FROM THE BLOCK OF ASSETS. THIS AMENDMENT WAS MADE BECAUSE NOW THE ASSESSEES ARE NOT R EQUIRED TO MAINTAIN PARTICULARS OF EACH ASSET SEPARATELY AND IN THE ABSENCE OF SUCH PARTICULAR, IT CANNOT BE ASCERTAINED WHETHER ON SALE OF ANY ASSET, THERE WAS ANY PROFIT LIABLE TO BE TAXED UNDER SECTION 41(2) OR TERMINAL LOSS ALLOWABLE UNDER ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 8 OF 10 SECTION 32(1 ) (III). THIS AMENDMENT ALSO STRENGTHEN THE CLAIM THAT NOW ONLY DETAIL FOR 'BLOCK OF ASSETS' HAS TO BE MAINTAINED AND NOT SEPARATELY FOR EACH ASSET. 34. HAVING REGARD TO THIS LEGISLATIVE INTENT CONTAINED IN THE AFORESAID AMENDMENT, IT IS DIFFICULT TO ACCEPT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE REVENUE THAT FOR ALLOWING THE DEPRECIATION, USER OF EACH AND EVERY ASSET IS ESSENTIAL EVEN WHEN A PARTICULAR ASSET FORMS PART OF BLOCK OF ASSETS. ACCEPTANCE OF THIS CONTENTION WOULD MEAN THAT THE ASSESSE E IS TO BE DIRECTED TO MAINTAIN THE DETAILS OF EACH ASSET SEPARATELY AND THAT WOULD FRUSTRATE THE VERY PURPOSE FOR WHICH THE AMENDMENT WAS BROUGHT ABOUT. IT IS ALSO ESSENTIAL TO POINT OUT THAT THE REVENUE IS NOT PUT TO ANY LOSS BY ADOPTING SUCH METHOD AND ALLOWING DEPRECIATION ON A PARTICULAR ASSET, FORMING PART OF THE BLOCK OF ASSETS EVEN WHEN THAT PARTICULAR ASSET IS NOT USED IN THE RELEVANT ASSESSMENT YEAR. WHENEVER SUCH AN ASSET IS SOLD, IT WOULD RESULT IN SHORT TERM CAPITAL GAIN, WHICH WOULD BE EXIGIB LE TO TAX AND FOR THIS REASON, WE SAY THAT THERE IS NO LOSS TO THE REVENUE EITHER. IT WAS ALSO SUBMITTED BEFORE US THAT THE CLAIM FOR DEPRECIATION FOR THE SUBSEQUENT AYS WAS ALLOWED BY THE ASSESSING OFFICER. 15. IN VIEW OF THE BINDING JUDGEMENT OF THE J URSIDICTIONAL HIGH COURT WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEPRECIATION OF THE ASSESSEE. IN THE RESULT GROUND NO.4 IS ALLOWED. 16. GROUND NO.5 IS AGAINST THE INITIATION OF PENALTY PROCEEDINGS AGAINST THE ASSESSEE. THIS GROUND IS DISMI SSED AS PREMATURE. 17. WE NOW TAKE UP THE REVENUE S APPEAL IN ITA 2024/DEL/2013, WHICH IS ON THE FOLLOWING GROUNDS. 1. WHETHER THE CIT(APPEALS) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WAS JUSTIFIED IN ALLOWING THE DEPRECIATION ON IMPAIRE D ASSET? 2. WHETHER THE CIT(APPEALS) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO RS.4,44,757/ - OUT OF TOTAL ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 9 OF 10 DISALLOWANCE OF RS.46,21,325/ - THEREBY GIVING A RELIEF OF RS.41,76,568/ - ON ACCOUNT O F DISALLOWANCE OF MANAGERIAL REMUNERATION PAID TO THE DIRECTORS, WHICH IS OVER AND ABOVE THE PRESCRIBED LIMIT? 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 18. GROUND NO.1 IS DISMISSED IN VI EW OF OUR DECISION IN GROUND NO.4 OF THE ASSESSEE S APPEAL. GROUND NO.2 IS ALSO DISMISSED FOR THE REASON THAT THE ASSESSING OFFICER RESTRICTED THE CLAIM OF EXPENDITURE ON MANAGERIAL REMUNERATION ON THE GROUND THAT THE ASSESSEE HAS NOT OBTAINED NECESSARY P ERMISSION FROM THE REGISTRAR OF COMPANIES AND THE LD.CIT(APPEALS) OBSERVED THAT THE NECESSARY PERMISSION WAS SUBSEQUENTLY OBTAINED BY THE ASSESSEE AND ALLOWED THE ENTIRE CLAIM. AS THE DEPARTMENT OF COMPANY AFFAIRS HAS GIVEN ITS APPROVAL FOR PAYMENT OF S ALARY TO SHRI R AVINDER KHANNA, THE FINDING OF THE FIRST APPELLATE AUTHORITY IS UPHELD AND THIS GROUND OF REVENUE IS DISMISSED. 1 9 . IN THE RESULT ASSESSEE S APPEAL IS ALLOWED IN PART AND REVENUE S APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH AUGUST , 2014. SD/ - SD/ - ( I.C.SUDHIR ) ( J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 08 TH AUGUST, 2014 *MANGA ITA NO. 1476/DEL/13 & ITA NO. 2024/DEL/13 ASSESSMENT YEAR 2002 - 03 DELPHI AUTOMOTIVE SYSTEMS PVT.LTD., NEW DELHI PAGE 10 OF 10 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR