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2016 (3) TMI 530 - ITAT DELHIDeduction u/s 80IC - Held that:- We find that the ld. CIT (A) has not admitted the additional evidence and has without deliberating on the merits of the matter has simply stated a line "that for non production of 10CCB and on merits also, he is disallowing the claim of the Baddi unit u/s 80IC." It is a trite law that the onus is on the person claiming expenditure/exemption / deduction under the Act. Since it is the first year of claim of 80IC deduction of the Baddi unit, the burden is on the assessee to qualify the eligibility criteria to claim 80IC deduction. Once the assessee has discharged its burden then the onus shifts to the AO to prove why the claim shall not be granted fully or partly to the assessee. We find that the counsel for the assessee was of the bonafide belief that along with the claim of 80IC and 80I deduction, the Form 10CCB was not required since the accounts of the assessee are audited as per the statute. The assessee cannot be penalized for the bonafide mistake of the counsel, so in the interest of justice, we admit Form 10CCB and we set aside the order of the authorities below and remand the matter back to the file of the AO to adjudicate the claim of the assessee for 80IC for Baddi unit and 80I for Gurgaon unit and direct him to admit Form 10CCB and de novo adjudicate both the claims. Disallowance of interest - Held that:- Interest on working capital and term loan, which is only ₹ 9,90,825/- and ₹ 3,71,187/- respectively. Further, interest of ₹ 9,90,825/- is for availing facilities of packing credit, bills purchases, OCC and not for any diversion of funds for non-business purposes. Further, it is neither been established such interest on term loan was for capital work-in-progress. Moreover, identical interest has been allowed in the preceding year (AY 2005-06). Having regard to the above, disallowance made is deleted. - Decided in favour of assessee Disallowance of depreciation on factory building - Held that:- We find that the CIT (A) has not considered the depreciation chart furnished by the assessee. We further notice that even the AO has held that whether the asset was put to use or not could not be ascertained. Having regard to the above, it is apparent that the disallowance has been made, without proper investigation and consideration of the facts. We, therefore, restore the matter back to the file of AO, for de novo consideration this issue. Disallowance on account of subscription and membership fee - Held that:- We find that no evidence was led by the AR to dislodge the finding that expenditure was incurred wholly and exclusively for the purposes of business of the assessee company. The claim that though the accommodation was in the name of director but was used by the customers/employees is entirely unsubstantiated. We, therefore, do not find any merit in the claim, so the same is dismissed. Deduction claimed by the assessee u/s 80I on the duty drawback and job work charges - Held that:- Having already held that the claim of 80IC needs to be de novo adjudicated and since this issue is interlinked with that issue, in the fitness of things, we are inclined to remit this issue also to the file of the AO. Disallowance of of traveling expenses - Held that:- There is no dispute that there is no basis for making the ad hoc disallowance of ₹ 5 lakhs. That being the case, we uphold the conclusion of the ld. CIT (A) and dismiss this ground of the revenue.
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