The Tax Publishers2013 TaxPub(DT) 0828 (Mum-Trib) : (2013) 052 (II) ITCL 0396 : (2013) 022 ITR (Trib) 0424

Income Tax Act, 1961

--Business expenditure --Depreciation Allowability--Assessing officer viewed that assessee-company had discontinued its manufacturing activity at K factory and therefore disallowed the expenses related to it. Assessee contended before Commissioner (Appeals) that there being unity of control and management of finance as well as inter-lacing of funds and inter-connection of all the business activities, therefore, mere discontinuation of one of the units did not amount to discontinuation of the business. Commissioner (Appeals) directed Assessing officer to allow the expenses claimed by assessee but however, disallowed some expenses including depreciation. Held : Expenses incurred to protect the business assets should be allowed as deduction. Moreover, assets of K unit having already entered the block of assets of assessee, depreciation thereon could not be disallowed on the ground of non-user as the use of block of assets was to be considered and not the use of individual assets. Therefore, respectfully following the orders of the coordinate bench of this Tribunal on a similar issue in the assessee's own case for the assessment years 2000-01 and 2001-02, disallowance was deleted and all expenses were allowed.

Income Tax Act, 1961, Sections 32 & 37

Income Tax Act, 1961

--Business deduction under section 35D--Amortization of preliminary expenses Expenses on issue of right shares--Assessing officer disallowed the assessee's claim to deduction under section 35D of one-tenth of the expenses incurred in relation to the issue of rights shares. Commissioner (Appeals) confirmed the disallowance. Tribunal observed that assessee's claim for deduction under section 35D came up for consideration in the assessment year 1999-2000 and the same was decided in favour of assessee The issue, however, was restored to the file of the assessing officer who quantified the amount eligible for deduction under section 35D in the assessment year 1999-2000. Held : Assessing officer was directed to allow the deduction under section 35D for the year under consideration, keeping in view the expenses eligible for such deduction as quantified by him in the assessment year 1999-2000.

Income Tax Act, 1961, Section 35D

Income tax Act, 1961

--Disallowance under section 14A--Expenditure against exempt income Basis of disallowance of expenditure --Assessee earned dividend and interest on tax-free bonds which it claimed to be exempt from tax but did not show any expenses against such income. Assessing officer therefore quantified such expenditure under rule 8D and made a disallowance under section 14A. On appeal, the Commissioner (Appeals) confirmed the disallowance. Held : Rule 8D was not applicable for relevant assessment year and therefore, disallowance was to be made on reasonable basis.

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com