Case Law Details
In “CIT v. Hero Cycles” (supra), it was held by the Punjab & Haryana High Court, inter alia, that the contention of the Revenue that directly or indirectly some expenditure was always incurred, which must be disallowed u/s 14A of the Act and the impact of the expenditure so incurred could not be allowed to be set off against the business income which may nullify the mandate of section 14A, could not be accepted;
and that the disallowance u/s 14A required a finding of incurring of expenditure and where it was found that for earning exempted income, no expenditure had been incurred, disallowance u/s 14A could not stand. In the present case, as seen, the AO has not established any nexus whatsoever between the borrowed funds and the investment made. Therefore, “Hero Cycles” (supra), is applicable.
Allowability of Balance Additional Depreciation in Subsequent Year
In this case, the assessee claimed additional depreciation @7.5%, being 50% of the additional depreciation of 15%, in respect of new plant and machinery installed at the new eligible industrial undertaking of the company which was allowed. Therefore, it was held that the eligibility of additional depreciation stands admitted and balance 50% of the depreciation is allowable in the current year.
INCOME TAX APPELLATE TRIBUNAL, DELHI
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