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2019 (6) TMI 594 - ITAT AHMEDABADDisallowance u/s.80-IA - AO found that there was no profit of such eligible unit in the year under consideration - Whether the assessee was required to carry forward the loss of the eligible unit incurred by it before the initial assessment year for the set off against the profit of the subsequent year of such eligible unit if any? - HELD THAT:- A plain reading of the above provisions reveals that the assessee can claim the set off of the loss incurred by it in respect of eligible unit before the initial assessment year against the income of non-eligible units as per the provisions of law. Thus there remains no ambiguity that the assessee was not required to carry forward losses of the eligible unit before the initial assessment year to claim the set off such losses against the income of the subsequent assessment years. See VELAYUDHASWAMY SPINNING MILLS P. LTD. [2010 (3) TMI 860 - MADRAS HIGH COURT] loss in the year earlier to initial assessment year already absorbed against the profit of other business cannot be notionally brought forward and set off against the profits of the eligible business, as no such mandate is provided in section 80-IA(5) Allocate the interest expense incurred by it to the unit eligible for deduction u/s 80-IA - HELD THAT:- We note that the assessee’s own fund exceeds the amount invested in the eligible unit. This fact can be verified from the financial statement of the assessee, which is available. Therefore it can be presumed that the assessee has invested own fund in the eligible unit. Accordingly, there cannot be any question of allocation of the interest cost incurred by the assessee in respect of other non-eligible units to eligible unit. No interest expense claimed by the assessee can be allocated to the unit eligible for deduction u/s 80-IA. Accordingly, we are of the view that the order passed by the learned CIT (A) does not require any interference. Accordingly, we uphold the same. Hence the ground of appeal of the Revenue is dismissed. Disallowance u/s 14A - HELD THAT:- We hold that the disallowances in the present case u/s14-A read with rule 8D cannot exceed the amount of dividend income for ₹ 1,28,529.00 only. Hence we do not find any infirmity in the order of the learned CIT (A). Thus the ground of appeal of the Revenue is dismissed. Addition u/s 36(1)(iii) - interest expenses attributable to capital working progress - HELD THAT:- Identical issue was decided by this tribunal in favor of the assessee in its own case in [2018 (12) TMI 1654 - ITAT AHMEDABAD] no disallowance of interest expense claimed by the assessee can be made on account of fund invested in the capital work in progress as discussed above. Hence, we reverse the order of the authorities below. The AO is directed to delete the addition made
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