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2014 (1) TMI 297 - ITAT MUMBAIDepreciation - Held that:- Following Plastblends India Limited Vs. CIT [2009 (10) TMI 39 - BOMBAY HIGH COURT] - The quantum of deduction under section 80-IA is not dependent upon the assessee claiming or not claiming depreciation, because, under section 80-IA the quantum of deduction has to be determined by computing total income from business after deducting all deductions allowable under sections 30 to 43D of the Act - For the purposes of deduction under Chapter VI-A, the gross total income has to be computed, inter alia, by deducting the deductions allowable under sections 30 to 43D of the Act, including depreciation allowable under section 32 of the Act, even though the assessee has computed the total income under Chapter IV by disclaiming the current depreciation - Decided against assessee. Interest income on fixed deposits - Held that:- Following CIT Vs. Pandian Chemicals Ltd [2003 (4) TMI 3 - SUPREME Court] - Incentive u/s.80IB is given to encourage industrial activity, hence deduction is given on income from industrial activity not on interest income from mere depositing the amount with bank or any other institution - interest income from fixed deposits being not the income from industrial activity is not eligible for deduction under section 80IB of the Act. The assessee has claimed set off of the interest expenditure against the interest income pleading that the said expenditure has direct nexus with the interest income - The said contention of the assessee has not been adjudicated by the authorities below - The issue has been restored for fresh adjudication. Whether disallowances made u/s 14A be added to compute book profits u/s 115JB - Held that:- Following Godrej Consumer Products Ltd [2013 (11) TMI 1245 - ITAT MUMBAI] - On combined reading of section 14A with clause (f) of the explanation to section 115JA or clause (f) of the explanation (1) to section 115JB - It can be observed that they do not have any type of conflict with each other. What has been provided under sub section (1) of section 14A is that the expenditure incurred for exempt income is not allowable as a deduction whereas under sub section (2) a method of computation of such expenditure has been provided and in sub section 3 to section 14A it has been mentioned that such method would be applicable even in cases where the assessee claims that no expenditure has been incurred by him in relation to exempt income - Under clause (f) of the explanation (1) of section 115JB it has been provided that the amount of expenditure relatable to exempt income is to be added back in the book profits while computing tax under section 115JB - On perusal of the provisions of section 14A along with section 115JB, it becomes clear that the expenditure relatable to exempt income as provided under sub section (1) of section 14A is required to be added back while computing book profit under section 115JB - Decided against assessee.
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