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2017 (9) TMI 1905 - AT - Income TaxDeduction u/s.80IB(3)(ii) - whether assessee will lose the benefit of said deduction when it grows into a larger Industry outside the definition of SSI unit? - HELD THAT:- There is no dispute on the fact of SSI status when the assessee was incorporated and when it first claimed deduction u/s.80IB(3)(ii) of the Act in the A.Y. 2003-04. The sub-section (3) refers to the ‘any particular undertaking’ notified in the Official Gazette and the ‘undertaking’ refers to the Small Scale Industries. The deduction is available for 10 consecutive years beginning with the ‘initial assessment year’ subjected to the fulfillment of the conditions mentioned in clause (i) & (ii) of sub-section (3) of section 80IB. As decided in M/S ACE MULTI AXES SYSTEMS LTD [2014 (8) TMI 596 - KARNATAKA HIGH COURT] if an SSI in the course of 10 years stabilizes early, makes profits, makes further investments in the business the said growth should not come in the way of its claiming benefit u/s.80IB(3)(ii) for 10 consecutive years from the initial assessment year. In our view, the facts of the present case are in sink with that of the facts of the case of Ace Multi Axes Systems Ltd. (supra) - Decided in favour of assessee. Gains earned on sale of shares - short term capital gain or business income - Assessee claimed it as capital gains - HELD THAT:- As assessee maintains two separate accounts, i.e., investment account and stock in trade. In the past also, similar dispute exists as the AO treated the short term capital gains income as the Business income of the assessee. On hearing both the parties and considering the facts, we find that the need of honouring the entries in the books of account. No case is made out for disturbing the claim of the assessee. This is the case where only 55 transactions are involved and separate account for investment is maintained. Therefore, there is a case for applying the Apex Court’s judgement in the case of Gopal Purohit [2010 (11) TMI 222 - SC ORDER]. Therefore, in our view, the order of the CIT(A) is required to be reversed on this issue and in favour of the assessee. Exemption u/s 14A - Suo moto disallowance by assessee - HELD THAT:- We are of the opinion that it is settled legal proposition that the disallowance u/s.14A read with Rule 8D should not exceed the exempt income. Therefore, we direct the AO to restrict the disallowance to the exempt income of ₹ 1,37,806/- after netting the suo moto disallowance of ₹ 24,508/- discussed above. Quantum of deduction u/s 80IA - HELD THAT:- Deduction u/s.80IA(4)(iv)(a) of the Act without deducting brought forward loss or unabsorbed depreciation prior to initial year on notional basis.
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