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2014 (1) TMI 621 - AT - Income TaxDisallowance u/s 14A - Held that:- Following Godrej & Boyce Manufacturing Company Ltd. vs. DCIT and Others [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the provision of section 14A are applicable and the disallowance has to be worked out by the A.O. on some reasonable basis and not under Rule 8D. Since the A.O. while calculating the disallowance u/s.14A has also applied Rule 8D of the Income Tax Rules, 1962, which is applicable from the A.Y. 2008-09 - The issue has been restored for fresh adjudication. Exemption u/s 10(35) - Held that:- The assessee has earned tax free income from bonds of UTI - CIT(A) held that the decisions in CIT vs. Silk & Art Silk Mills Association Ltd. [1989 (10) TMI 35 - BOMBAY High Court] distinguish - Even if the income is exempt, the same has to be included in the gross receipts and has to be applied as per provisions of section 11(1) because income has to be computed in commercial manner - The ld. CIT(A) has not adjudicated the issue properly and has not passed a reasoned order - The issue has been restored to the file of CIT(A) for fresh adjudication in accordance with the decision in General Insurance Corporation of India vs. DCIT [2011 (12) TMI 70 - BOMBAY HIGH COURT]. Whether depreciation on fixed assets claimed as application of income be double deduction - Held that:- Following Lissie Medical Institutions vs. CIT [2012 (4) TMI 115 - KERALA HIGH COURT] - Assessee is not claiming double deduction on account of depreciation as has been held by the Revenue Authorities - The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purpose of Trust - There is no double deduction claimed by the assessee - Decided in favour of assessee. Denial of claim of adjustment of carry forward of excess application of income - Held that:- The assessments for the earlier assessment years (i.e. 2003-04) are still pending before the A.O. in which the Tribunal has directed the A.O. to allow exemption as a result of registration u/s 12AA which is now available to the assessee - The issue has been restored for fresh adjudication in view of the decision of the Tribunal. Interest u/s 234D - Held that:- Following CIT vs. M/s Indian Oil Corporation Ltd. [2012 (9) TMI 517 - BOMBAY HIGH COURT] - As per Explanation 2 which has been inserted in sec 234D by the Finance Act, 2012 with retrospective effect from 1.6.2003 - The provisions of sec. 234D shall also apply to the assessment year commencing before the first day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date - The A.O. was justified in charging the interest u/s 234D of the Act - Decided against assessee.
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