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2019 (7) TMI 1491 - ITAT DELHIDeduction u/s.10B - whether DEPB benefits are eligible for deduction ? - HELD THAT:- As relying on ACIT, CIRCLE-2, GURGAON VERSUS M/S QH TALBROS LTD. [2015 (11) TMI 737 - ITAT DELHI] consider the export benefits for the purpose of deduction under Section 10B of the Act. Therefore, the reasoning of CIT(A) while allowing these grounds of appeal is upheld. Hence, the ground of appeal file the Revenue is dismissed. Disallowance of interest on account of interest on investments - HELD THAT:- AO has merely made the disallowance following the ratio laid down in the case of CIT vs. Abhishek Industries Ltd. [2006 (8) TMI 123 - PUNJAB AND HARYANA HIGH COURT] whereas the fact of the matter was that assessee is not given any interest free loan but made investment in M/s. Talbros Automotive Company Ltd. out of its own surplus funds. Thus, there could not be case of giving any interest free loan. Moreover, we find that this issue has been decided in favour of the assessee not only in the Assessment Year 2007-08, but also in the Assessment Year 2010-11, wherein this issue has been decided in favour of the assessee. Accordingly, disallowance of interest made by the AO has rightly been deleted by the ld. CIT (A). Disallowance of interest under proviso to Section 36(1)(iii), being interest @12% on capital-work-in-process - After invoking proviso to Section 36(1)(iii), Assessing Officer disallowed interest @12%. - HELD THAT:- We find that in Assessment Year 2007-08, the Tribunal has deleted the similar addition not only in the Assessment Year 2007-08, but also in the Assessment Year 2010-11. Otherwise also, once this fact has not been disputed that interest for the period between the date of disbursement of loan and date of putting the assets in use has been disallowed as per Section 36(1)(iii) by the assessee itself, then without there being any factual infirmity either for the period up to putting the asset in use or in the computation, no such disallowance can be made. Accordingly, this issue is decided in favour of the assessee. Disallowance u/s.14A - HELD THAT:- Assessee has earned dividend of ₹ 11,19,530/- and AO has mechanically applied Rule 8D for making the disallowance u/s.14A without any satisfaction having regard to the accounts maintained by the assessee as mandated in Section 14A(2). The Tribunal in the earlier years has deleted the disallowance on the ground that AO has not given any reasons as to how he is not satisfied with correctness of the claim of the assessee. Now it is well settled principle laid in the case of Maxopp Investment Ltd. vs. CIT, [2018 (3) TMI 805 - SUPREME COURT] that recording of satisfaction by the AO is mandatory before proceeding to make any disallowance u/r 8D which here in this case has not been done. Accordingly, disallowance of Section 14A has rightly been deleted.
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