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2013 (9) TMI 446 - AT - Income TaxDeduction u/s 80IB(10) - Project wise deduction - Whether the assessee is entitled for deduction u/s 80IB - Held that:- that for determining the amount which qualifies for deduction u/s 80IB(1), one has to compute the income from eligible business as if the eligible business was the only source of income of the assessee. In other words, the income or loss from other business or other activities are to be ignored for the purpose of determining the amount which is eligible for deduction u/s 80IB(1) of the Act - gross total income of the assessee is ₹ 2,56,37,975/- after adjusting losses suffered by the assessee in the other two 'projects viz. 'Shreyas' and 'Coimbatore'. There are no brought forward losses or unabsorbed depreciation. The claim of deduction u/s 80IB in respect of the two eligible units viz. 'Spandhana' and 'Samruddhi' of ₹ 2,23,22,237/- is obviously less than the gross total income. In our considered opinion, the Assessing Officer as well as the ld. CIT(A) erred in interpreting the relevant provisions when they held that the losses suffered by the assessee from two projects, viz. 'Shreyas' and 'Coimbatore' be reduced from the profits of the other two units viz. 'Spandhana' and 'Samruddhi' for granting deduction u/s 80IB. Accordingly, the impugned orders of the lower authorities are set aside. The Assessing Officer is directed to allow deduction u/s 80IB on the profits derived by the assessee from two projects viz. 'Spandhana' and 'Samruddhi' of ₹ 2,23,22,237 - Following decision of CIT v. Canara Workshop (P.) Ltd. [1986 (7) TMI 5 - SUPREME Court] - Decided in favour of assessee. Disallowance u/s 14A - Held that:- unless the Assessing Officer reaches a satisfaction after examination of accounts on the basis of reasons recorded in the assessment order that the claim of quantum expenditure of the assessee as incurred in relation to the exempt income is not acceptable then, the Assessing Officer has no jurisdiction to invoke the provisions of Rule 8D of the IT Rules. In the instant case, in the absence of any reason for considering the claim of the assessee as unsatisfactory, in our considered view, the invocation of Rule 8D by the Assessing Officer was without jurisdiction and consequently unsustainable. We, therefore, delete the disallowance of ₹ 9,12,875/- and direct the Assessing Officer to restrict the disallowance u/s 14A to ₹ 15,000/- only - Following decision of MAXOPP Investment Ltd. vs. CIT & Others [2011 (11) TMI 267 - Delhi High Court] - Decided in favour of assessee.
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