DCIT, New Delhi V. Eicher Motor Ltd., New Delhi

ITA 5020/DEL/2012

• Counselvise Citation: 502020114 RSA 2012
• Duration Of Justice: 44 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .5020/DEL/2012 5020/DEL/2012 5020/DEL/2012 5020/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), ROOM NO 11(1), ROOM NO 11(1), ROOM NO 11(1), ROOM NO.312, .312, .312, .312, C.R. BUILDING, C.R. BUILDING, C.R. BUILDING, C.R. BUILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, 12, COMMERCIAL COMPLEX, 12, COMMERCIAL COMPLEX, 12, COMMERCIAL COMPLEX, 12, COMMERCIAL COMPLEX, GREATER KAILASH GREATER KAILASH GREATER KAILASH GREATER KAILASH- -- -II, II,II, II, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 048. 110 048. 110 048. 110 048. PAN : AAACE3882D. PAN : AAACE3882D. PAN : AAACE3882D. PAN : AAACE3882D. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SUDHA KUMARI, CIT-DR. RESPONDENT BY : SHRI GAURAV JAIN, ADVOCATE AND SHRI UPVAN GUPTA, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XIII, NEW DELHI DATED 19 TH JULY, 2012 FOR THE AY 2008-09. 2. GROUND NO.1 OF THE REVENUES APPEAL READS AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.1,78,5 88/- MADE ON ACCOUNT OF EXCESS DEPRECIATION ON COMPUTER PERIPHERALS LIKE UPS, PRINTERS, SCANNERS, NETWORKING, C HAR, VAN, SWITCHES. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED RELEVANT MATERIAL PLACED BEFORE US. WE FIND THAT TH IS ISSUE IS SQUARELY ITA-5020/DEL/2012 2 COVERED BY THE DECISION OF HON'BLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. BSES RAJDHANI POWERS LTD. VIDE ITA NO.1266 /2010 WHEREIN HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE A SSESSEE IS ENTITLED TO HIGHER RATE OF DEPRECIATION, I.E., AT THE RATE O F 60% ON COMPUTER ACCESSORIES AND PERIPHERALS INSTEAD OF THE NORMAL RATE O F 25%. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF LEARNED CIT(A) IN THIS REGARD AND REJECT GROUND NO.1 OF THE REVENUE S APPEAL. 4. GROUND NO.2 READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.8,72,9 2,641/- MADE UNDER SECTION 14A READ WITH RULE 8D OF THE INC OME TAX RULES, 1962. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED RELEVANT MATERIAL PLACED BEFORE US. LEARNED COUNSEL FOR THE ASSESSEE HAS FAIRLY STATED THAT THE ASSESSING OFFICER HAS COMPUTED THE DISALLOWANCE UNDER SECTION 14A AS PER RULE 8D OF THE INCOME TAX RULES. THE ASSESSEE AGREES THAT THE YEAR UNDER APPEAL IS AY 2008-09 AND, THEREFORE, RULE 8D WAS APPLICABLE. HE, HOWEVER , STATED THAT THERE WERE CERTAIN MISTAKES IN THE COMPUTATION OF DISALLOWAN CE UNDER RULE 8D. THAT THE ASSESSING OFFICER HIMSELF VIDE ORDER UNDER SECTION 154 DATED 23.02.2012 HAS MODIFIED THE DISALLOWANCE TO ` 35,78,902/- AS AGAINST ` 8,72,92,641/- MADE IN THE ORIGINAL ASSESSMENT ORDER. H E STATED THAT WHILE TAKING THE VALUE OF THE AVERAGE IN VESTMENT, ORIGINALLY THE ASSESSING OFFICER HAD CONSIDERED DEBENTURES AND BONDS, INCOME FROM WHICH IS NOT EXEMPT. THEREFORE, ASSESSING OFFICER HIMSELF HAS ACCEPTED THE ASSESSEES APPLICATION FILED UNDER SECTION 154 AND MODIFIED HIS ORDER. BEFORE THE CIT(A), ASSESSEE POINTED OUT THAT THE INVESTMENT IN SHARES IS PARTLY IN INDIAN COMPANY AND PA RTLY IN THE COMPANIES OTHER THAN INDIAN COMPANY. THAT DIVIDEND FROM INDIAN ITA-5020/DEL/2012 3 COMPANY ONLY IS EXEMPT AND, THEREFORE, WHILE COMPUTI NG THE AVERAGE INVESTMENT IN THE EXEMPT ASSETS, THE INVESTMENT IN THE F OREIGN COMPANIES HAS TO BE EXCLUDED. THE CIT(A) HAS ACCEPT ED THE ASSESSEES CONTENTION AND EXCLUDED THE INVESTMENT IN THE FOREIGN COMPANY. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) IS PERFECTLY IN ORDER. THE SAME SHOULD BE UPHELD. 6. LEARNED DR, ON THE OTHER HAND, STATED THAT THIS C ONTENTION OF THE ASSESSEE WOULD REQUIRE VERIFICATION. THEREFORE, THE MA TTER MAY BE SENT BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMI NING THIS ASPECT. 7. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. THAT SUB-CLAUSE (III) OF RULE 8D(2) READS AS UNDER:- 8D(2) 8D(2) 8D(2) 8D(2) THE EXPENDITURE IN RELATION TO INCOME WH ICH DOES NOT FORM PART OF THE TOTAL INCOME SHALL BE THE AGGREGATE OF FOLLOWING AMOUNTS, NAMELY:- (I) .. (II) .. (III) AN AMOUNT EQUAL TO ONE-HALF PER CENT OF THE A VERAGE OF THE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NO T OR SHALL NOT FORM PART OF THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE L AST DAY OF THE PREVIOUS YEAR. 8. FROM THE ABOVE, IT IS EVIDENT THAT FOR THE PURPOSE OF THIS CLAUSE, ONLY THE ASSETS, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF TOTAL INCOME, IS TO BE CONSIDERED. THEREFORE, THE IN VESTMENT IN THE SHARES IN THE COMPANY WHOSE DIVIDEND INCOME IS TAXABLE CANNOT BE CONSIDERED AS INVESTMENT FOR THE PURPOSE OF THIS CLAUSE. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO EXAMINE THE ASSESSEES CONTENTION AND EXCLUDE THE ASSETS, INCOME FROM WHICH I S TAXABLE. ITA-5020/DEL/2012 4 NEEDLESS TO MENTION THAT HE WILL ALLOW ADEQUATE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE WHILE GIVING EFFECT TO OUR ORDER . 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2014. SD/- SD/- ( (( (ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 30.05.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TAX , DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), ROOM NO 11(1), ROOM NO 11(1), ROOM NO 11(1), ROOM NO.312, .312, .312, .312, C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. 2. RESPONDENT : M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, M/S EICHER MOTOR LIMITED, 12, COMMERCIAL COMPLEX, GREATER KAILASH 12, COMMERCIAL COMPLEX, GREATER KAILASH 12, COMMERCIAL COMPLEX, GREATER KAILASH 12, COMMERCIAL COMPLEX, GREATER KAILASH- -- -II, II,II, II, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 048. 110 048. 110 048. 110 048. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR