DCIT CIR 6(2)(1), MUMBAI V. CEAT LTD, MUMBAI

ITA 5521/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9559 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: RAKESH MOHAN
• Keywords: Depreciation
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD , JM ITA NO. 5521 / MUM/20 1 5 ( ASSESSMENT YEAR : 2010 - 11 ) DCIT CIR 6(2)(1) R.NO.563, AAYAKAR BHAVAN M.K.ROAD, CHURCHGATE MUMBAI 400 020 VS. M/S. C EAT LTD., 463, CEAT MAHAL BESANT ROAD, WORLI, MUMBAI 400 018 PAN/GIR NO. AAACC1645G APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI RAJAT MITTAL ASSESSEE BY SHRI RAKESH MOHAN DATE OF HEARING 11 / 09 /201 7 DATE OF PRONOUNCEME NT 13 / 09 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 12, MUMBAI DATED 24/09/2015 FOR THE A.Y. 2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. IN THIS APPEAL, REVENUE IS AGGRIEVED FOR DELETING THE DISALLOWANCE MADE BY AO U/S.14A R.W.R. 8D. WE HAVE HEARD RIVAL CONTENTIONS AND FOUND THAT CIT(A) DELETED THE ADDITION BY FOLLOWING THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09. THE PRECISE OBSERVATION OF CIT(A) WAS AS UNDER: - IT IS SEEN THAT THE APPELLANT HAS NEITHER INCURRED INTEREST EXPENSES NOR INCURRED ANY OTHER EXPENSES FOR EARNING THE DIVIDEND INCOME. IT IS ALSO SEEN THAT THE APPELLANT IS IN POSSESSION OF SUFFICIENT OWNED FUNDS. THE ITA NO. 5521/MUM/2015 M/S. CEAT LTD., 2 HO N. MUMBAI ITAT IN THE APPELLANT S OWN CASE FOR A.Y. 2008 - 09 HAS HELD THE VIEW THAT NO DISALLOWANCE ON ACCOUNT OF INTEREST CAN BE MADE U/S. 14A SINCE APPELLANT'S OWN FUNDS EXCEED THE VALUE OF INVESTMENT. IT IS SEEN THAT THE APPELLANT HAS DISALLOWED RS. 2,00 ,000/ - SUO MOTTO U/S. 14A TOWARDS ITS ADMINISTRATIVE EXPENSES. RELIANCE IS PLACED ON THE HON. ITAT MUMBAI DECISION IN THE CASE OF FALI S. NARIMAN VS ADDL.CIT (2015) 56 TAXMANN.COM 155. THE APPELLANT'S CLAIM OF DISALLOWANCE OF RS. 2,00,000/ - ON ITS OWN ONLY IS TO BE ALLOWED. THIS IS BECAUSE THE APPELLANT HAS MAINTAINED PROPER ACCOUNTS WHICH ARE DULY AUDITED AND NO ENQUIRY HAS BEEN MADE BY THE A.O. RELATING TO EXPENDITURE DEBITED IN BOOKS OF ACCOUNT. THE APPELLANT HAS ALSO BASED ITS CLAIM OF HAVING INCURRED A LOWER EXPENDITURE THAN THAT AS PER THE STATUTORY PROVISIONS OF RULE 8D. THUS, A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE OF RS. 2,00,000/ - 3. LEARNED D R DID NOT CONTROVERT THE FINDING RECORDED BY CIT(A) TO THE FACT THAT THE ISSUE IS COVERED BY THE OR DER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2008 - 09 . LEARNED AR HAS DRAWN OUR ATTENTION TO THE CAPITAL AND FREE RESERVES AVAILABLE TO THE ASSESSEE WHICH IS MORE THAN THE INVESTMENT. WE FOUND THAT WHILE CONSIDERING THE CAPITAL AND FREE RESERVES A VAILABLE TO THE ASSESSEE, TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2008 - 09 VIDE ORDER DATED 22/06/2015 AND FOR A.Y.2009 - 10 VIDE ORDER DATED 03/02/2016 HAVE DELETED THE DISALLOWANCE SO MADE BY THE AO U/S.14A R.W.R 8D. R ESPECTFULLY FOLLOWING THE ORDER S OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR RESTRICTING THE DISALLOW ANCE TO THE EXTENT OF RS.2 LAKHS . 4. REVENUE IS ALSO AGGRIEVED FOR DELETING DISALLOWANCE OF DEPRECIATION ON UPS AMOUNTING TO RS.1,16,823/ - . WE HAVE CONSIDERED RI VAL CONTENTIONS AND FOUND THAT CIT(A) HAS DELETED THE DISALLOWANCE OF DEPRECIATION AFTER OBSERVING AS UNDER: - ITA NO. 5521/MUM/2015 M/S. CEAT LTD., 3 IT IS A SETTLED LAW THAT UPS IS AN INTEGRAL PART OF THE COMPUTER AND THEREFORE, QUALIFIES FOR 60% DEPRECIATION. RELIANCE IS PLACED ON ORDERS OF TH E HON. HIGH COURT OF DELHI IN THE CASES OF CIT VS ORIENT CERAMICS AND INDUSTRIES LTD. AND CIT VS BSES YAMUNA POWERS LTD. AND HON. ITAT, MUMBAI IN THE CASE OF GODREJ SARA LEE LTD. VS ADDL. CIT. THUS, THE ADDITION OF RS. 1,16,826/ - IS DELETED. GROUND NO. 4 I S ALLOWED. 5. THE ISSUE IS ALSO COVERED BY THE DEC ISION OF DELHI HIGH COURT AND OTHER HIGH COURTS AS NARRATED BY CIT(A) IN HIS ORDER . ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR ALLOWING ASSESSEES CLAIM OF DEPRECIATION @60% ON UP S CONSIDERING THE SAME AS INTEGRAL PART OF COMPUTER. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 13 / 09 / 2017 S D/ - ( RAVISH SOOD ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 13 / 09 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//