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2013 (10) TMI 969 - AT - Income TaxDeduction of 1/5 of expenditure in the present year - assessee company had spent major amount and the benefit of which was expected to be derived for next five years and, therefore, in the books of account, the same expenditure was debited to miscellaneous expenses and l/5th of the same i.e. Rs.116.64 lacs is written off every year – Held that:- There is nothing on record in this regard as to whether in the assessment year 2003-04, full deduction was allowed or only l/5th deduction was allowed in that year. It may be there that in the books of account, the assessee has debited only l/5th of the amount in that year but in the computation of income, the entire amount can be claimed as deduction and the same might have been allowed in that year to the extent of 100%. Without examining this aspect, allowing any further deduction in the present year will result into allowing the double deduction - Restored back this matter to the file of the A.O. for a fresh decision. Computation of deduction u/s 80IA of the Income Tax Act – Held that:- A.O. has to consider the interest income as well as interest expenditure which is connected with the same and rework the deduction u/s 80IA as may be necessary. It goes to show that to the extent the assessee is eligible to establish the nexus of interest expenditure with interest income by showing that the interest expenditure was incurred for earning interest income, netting has to be allowed and only such net interest income has to be excluded from business profits for the purpose of computation of deduction allowable u/s 80IA - Revenue could not bring on record any contrary facts to the above observation – Decided against the Revenue. Disallowance u/s 40(a)(ia) of the Income Tax Act - Rebate given is in the nature of discount or interest – Held that:- Entire sales of the Assessee is to GUVNL and the payments received by the Assessee from it are towards sales from the customer. Nothing has been brought on record by the Revenue to demonstrate that the rebate given is not in the nature of discount but is in the nature of interest - Rebate is in the nature of discount no TDS u/s 194A is deductible on the same, as has been held by the Commissioner(A) – Decided against the Revenue.
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