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2020 (1) TMI 1606 - AT - Income TaxDisallowance of depreciation on the machinery parts capitalized in the earlier years - HELD THAT:- AO himself has allowed the claim in respect of machinery spares consumed during the year. Therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 1 with its sub ground is, accordingly, dismissed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- We have to state that Rule 8D of the Rules has been held to be applicable from Assessment Year 2008- 09. Therefore, for the year under consideration, there is no formula to compute the disallowance. However, at the same time, we are of the view that reasonable expenditure should be disallowed for earning exempt income. Though AO has attributed the administrative expenses on the ratio of the tax free income to total receipts and computed the disallowance at ₹ 28.04 lakhs, but we are of the opinion that such computation is on the higher side. We, therefore, direct the Assessing Officer to restrict the disallowance to ₹ 15 lakhs which should meet the ends of justice. The assessee will get relief of ₹ 13.04 lakhs. Accordingly, Ground No. 2 with sub grounds is partly allowed. Interest received on provisional assessment u/s 143(1) - HELD THAT:- As decided in own case [2019 (11) TMI 270 - ITAT DELHI] we restore the issue in dispute to the file of the Ld. Assessing Officer for verifying that the interest granted under section 143 (1) in relation to previous year corresponding to assessment year under consideration, but same has been subsequently withdrawn under section 143(3) of the Act passed in financial year 2003-04 and decide the issue in accordance with law after providing adequate opportunity of being heard to the assessee. Disallowance of deduction from income earned from PE in foreign countries and not chargeable to tax under DTAA in computing the book profit for the purpose of section 115JB of the Act - HELD THAT:- Hon'ble Supreme Court in the case of Apollo Tyres Limited [2002 (5) TMI 5 - SUPREME COURT] have held that the Book Profit as computed from the books of accounts maintained in accordance with the Companies Act is sacrosanct and it can be adjusted only for making increases and reductions as specifically provided in the Explanation to the said section. It has been categorically held that apart from the adjustment as provided in the Explanation, no adjustments can be made to the book profit as per the Companies Act. The exclusion of income under the DTAA is nowhere provided in the said Explanation. If it were the intention of the legislature to provide reduction in respect of the income under the DTAA, it would have been specifically provided of another clause below the said Explanation to the sectional 115JA. Therefore, find merit in the view of the AO that the appellant is not entitled to claim reduction in respect of the income covered by DTAA order of the AO on this ground is accordingly upheld'. Additions made while computing book profit u/s 115JB on account of provision for bad and doubtful debts, provision for doubtful advances and provision for loss on account of investment - HELD THAT:- As decided in own case [2019 (11) TMI 270 - ITAT DELHI] If the provision debited by assessee is indeed deducted from the total debts and only the net balance shown in the balance-sheet then by virtue of decision in the case of Yokogawa India Ltd. [2011 (8) TMI 766 - KARNATAKA HIGH COURT] there cannot be any addition of such amount under section 115JB of the Act. However, as mentioned by us, this aspect is not clear. Hence we are of the opinion that the issue regarding provision for doubtful debts requires a fresh look by the Assessing Officer. We, therefore, set aside the order of authorities below in so far as this aspect is concerned, and remit the matter back to the file of Assessing Office for consideration afresh in accordance with law. Disallowance while computing book profit as per section 115JB on sale of fixed asset - HELD THAT:- As decided in own case [[2019 (11) TMI 270 - ITAT DELHI]] as decided in Veekaylal Investment Company Private Limited [2001 (2) TMI 117 - BOMBAY HIGH COURT] while computing the book profit under the companies Act, the assessee has to include capital gains for computing the book profit under section 115J. Deduction u/s 80IA - HELD THAT:- The claim of deduction came up for adjudication for the first time in Assessment Year 2000-01 wherein as held appellant is entitled to claim deduction 80IA, which was wrongly denied - thus taking into the facts of the present case., we are the considered view that appellant is entitled to claim deduction 80IA, which was wrongly denied. Addition on account of provision for maintenance expenditure - HELD THAT:- CIT(A) has verified that the liability on account of maintenance expenses arisen in the year under consideration. Thus we do not find any error in the order of the Ld. CIT(A) in deleting the disallowance. Disallowance on account of provision of demobilization expenditure, provision for maintenance and provision for other expenses - HELD THAT:- We find that the Ld. CIT(A) has sustained the disallowance due to failure on the part of assessee in substantiating whether the liability arose during the year under consideration and also failure to submit necessary documentary evidence in support of the claim. Before us also, no evidences have been furnished by the assessee to substantiate the claim whether the expenses crystallised during the year. In our opinion, the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in the same. Disallowance on account of foreign exchange fluctuation loss - HELD THAT:- As loss should also be allowed as deductible expenditure in the year in which the same accrues or arises. It was brought to the notice of the ld. CIT(A) that similar forex loss has been allowed in Assessment Year 1998-99 and 2000-01. On the basis of this, the ld. CIT(A) correctly deleted the disallowance made by the Assessing Officer.
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