THE DCIT, CIRCLE-1(1)(1),, AHMEDABAD vs. M/S. AMAZON TEXTILES PVT. LTD.,, AHMEDABAD

Ground no. 1 is relating to deleting the disallowance of Rs. 1,26,08,625/- on account of additional depreciation claimed on assets leased out and not used for the purpose of its business u/s. 32(1)(iia).

Assessee is in the business of leasing activity and is earning income from leasing business and claimed additional depreciation on things and article which have been leased out by the assessee. But ld. A.O. was not agree with the contention of the assessee on the ground that assessee has not used machinery or plant for production and manufacturing of article or things and disallowed the claim of additional depreciation.

Thereafter, assessee preferred first statutory appeal before the ld. CIT(A) who allowed the claim of the assessee.

Therefore, respectfully following the above said judgment, we allow the claim of the assessee for additional depreciation and dismissed the ground of the appeal of the Revenue.

Now we come to ground no. 2 relating to deleting the addition of Rs. 29,09,768/- on account of disallowance u/s 14A r.w. Rule 8D of Income Tax Act.

The assessee has made investment of Rs. 77665000/- in a LLP, being assessee contribution to the capital of Limited Liability Partnership (LLP) in question was bound to produce every year and it had indeed produced this year taxable in case by way interest from the LLP. And on such income disallowance u/s. 14A cannot be made as investment in firms have resulted into taxable income. Therefore, in our considered opinion, ld. CIT(A) has rightly granted relief to the assessee and same does not require any kind of interference at out end. Thus, this ground of the appeal of the Revenue is dismissed.

In this ground, ld. A.O. contended that interest free loans have been made out of interest bearing funds towards which interest expense have been paid @ rate from 12% to 16%. Accordingly, A.O held that 15% of interest on the advances shall be disallowed and further observed that since interest bearing funds have been diverted for non business purpose as follows: Particulars Amount as on Amount as on 31/03/2011 31/03/2010

On the other hand, assessee contention was that it had sufficient interest free funds in form of share capital, share application money and reserve and surplus. Hence, proportionate interest disallowance cannot be made.

Thereafter, assessee preferred first statutory appeal before the ld. CIT(A) who granted relief to the assessee.

We have gone through the relevant record and impugned order. It is observed from the impugned order wherein in earlier assessment year 2008-09 and 2010-

After going through the impugned order, we are of the considered opinion, that ld. CIT(A) has passed detailed and reasoned order and same does not require any kind of interference at our end. Therefore same is dismissed.

The next ground with regard to relating to deleting the addition of Rs. 2909768/- on account of disallowance u/s. 14A r.w.R. 8D while computing book profit u/s. 115JB.

While computing book profit u/s. 115JB in assessee’s own case in ground no. 2 already we have granted relief to the assessee and dismissed the ground of the Revenue. Having parity with the said ground, we hold that disallowance u/s. 14A for book profit u/s. 115JB cannot be made. Therefore, this ground of appeal is dismissed.

In the result, the appeal filed by the Revenue is dismissed.

So far Assessee’s appeal in ITA 1997/Ahd/2016 for A.Y. 2012-13.

At the outset, assessee requested to withdraw the appeal. Permission is granted and appeal is dismissed as withdrawn.