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2015 (9) TMI 107 - ITAT BANGALOREDeduction u/s. 80IA in respect of profits of Windmill-I (4.14 MW) - CIT(A) directed to allow claim - Held that:- In the present case, as can be seen from the computation of total income filed by the Assessee, which is given as an annexure to this order, there was no carry forward loss/depreciation to be set off. The deduction claimed u/s.80-IA of the Act is not greater than the gross total income. In such circumstances, we are of the view that the CIT(A) was justified in directing the AO to allow the claim of the Assessee for deduction u/s.80-IA in respect of Unit-I. Following the decision of the Tribunal in assessee's own case [2012 (11) TMI 507 - ITAT BANGALORE] we uphold the order of the CIT(Appeals) - Decided against revenue. Disallowance u/s 14A - CIT(A) restricted disallowance in part - Held that:- proceeded to hold that from Asst. Year 07-08 to Asst. Year 08-09, the assessee has shifted the investments which would yield income which is taxable to investments which would yield income which is tax exempt. This cannot be the basis on which the AO can make disallowance u/s.14A read with Rule 8D of the Rules. The second reason given by the AO was that the assessee has taken working capital loan of more than ₹ 50 crores and paid interest thereon. According to the AO the Assessee when it liquidated investments which would yield income which is taxable, it ought to have used the proceeds on such liquidation to fund the working capital instead of investing such proceeds in investments which would yield income which is tax exempt. This cannot also be the basis on which the AO can reject the claim of the Assessee that no interest expenses were incurred to earn tax free income. The law is well settled that the AO cannot sit in judgment over the manner in which a businessman has to arrange his business affairs and decide as to what should be the manner in which a particular decision has to be made. He can invoke jurisdiction to make disallowance u/s.14A of the Act only on a finding that interest expenditure were incurred for earning tax free income. In our view the CIT(A) has rightly accepted the stand of the Assessee that no interest expenses whatsoever were incurred in respect of funds which were used to make investments which yielded tax free income. We do not find any grounds to interfere with the order of the CIT(A). The Assessee has not taken any specific stand regarding expenses claimed as deduction while computing its income is only in relation to earning such income and that no indirect expenses can be attributed to the earning of tax free income. In this regard it is necessary that the Assessee should point out as to how each item of expense debited to profit and loss account is wholly for the purpose of earning income which is taxable. We are of the view that it would be just and appropriate to direct the Assessee to make its claim in this regard. The AO will examine the claim of the Assessee and thereafter decide the issue in accordance with law as explained in judicial decisions. - Decided in favour of assessee for statistical purposes.
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