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2011 (1) TMI 36 - AT - Income TaxBusiness expenditure - environment monitoring expenses allowed - community development expenses allowed - expenditure on replacement of meters amounting to Rs. 75,32,88,942/- as allowed revenue expenditure - Head office expenses to be allocated before allowing deduction u/s 80IA Deduction u/s 80IA regarding power plant - application of subsection (8) - reasonable profit - the profits of the business of generation of power worked out by the Assessee on the basis of the price that it paid to TPC for purchase of power continues to be the best basis even after the order of MERC and therefore the same has to be accepted - income from sale of units of mutual fund and securities is business income and eligible for deduction u/s 80IB. The issue with regard to disallowance under section 14A has to be made in accordance with the principle laid down by the Hon’ble Bombay High Court (Godrej & Boyce Mfg.Co.Ltd. - 2010 (8) TMI 77 - BOMBAY HIGH COURT). Rule 8D should not be applied and the AO has to adopt a reasonable basis or method consistent with all relevant facts and circumstances and after affording reasonable opportunity to the assessee to place all germane material on the record. AO is correct treating net interest income amounting to Rs. 293,83,36,422/- received on Govt. Securities, Interest on Inter company deposits and bank deposits and other interest as "income from other sources" instead of the same taxed as “business income"
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