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2014 (6) TMI 437 - AT - Income TaxAddition of provision for tax recoverable – Reimbursement of income tax - Held that:- Following M/s ESSAR POWER LTD. Versus ADDITIONAL/ DEPUTY COMMISSIONER OF INCOME TAX, RANGE 5(1), MUMBAI [2012 (12) TMI 670 - ITAT MUMBAI] - the amount paid by the power purchasers by way of tax on the amount of tariff charges received by the assessee can be treated as the income of the assessee - payment of tax received by the assessee is a part of tariff charges as per agreements and it is an income in the hands of the assessee and therefore the said amount is to be included in the income of the assessee – Decided against Assessee. Disallowance made u/s 14A r.w. Rule 8D of the Act – Held that:- Rule 8D cannot be held to be applicable as the same would apply only from AY 2008-09 - The issue of disallowance is only with regard to administrative expenses - rule 8D is not applicable, the formula prescribed under the rule shall also not apply - There has to be some reasonable basis for allocating administrative expenses after looking at the nature of expenses and also the expenses which can be said to be attributable for making the investment which are capable of yielding exempt income – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. Deletion of interest income – Income from margin deposits, ICDs on Employees loan treated as income from other sources – Whether interest income is business income or not - Held that:- Following M/s ESSAR POWER LTD. Versus ADDITIONAL/ DEPUTY COMMISSIONER OF INCOME TAX, RANGE 5(1), MUMBAI [2012 (12) TMI 670 - ITAT MUMBAI] - CIT(A) has rightly held that interest from the margin money kept with the bank as well the interest on the loans to the employees is to be assessed as the business income – Decided against Revenue. Deletion of provision for income tax recoverable – Purchase of power – Computation of book profits u/s 115JB of the Act – Held that:- Following M/s ESSAR POWER LTD. Versus ADDITIONAL/ DEPUTY COMMISSIONER OF INCOME TAX, RANGE 5(1), MUMBAI [2012 (12) TMI 670 - ITAT MUMBAI] - There is no dispute that under clause (i) of Explanation 1 to section 115JB of the Act there is a retrospective amendment made by Finance (2) Act, 2009 w.e.f. 1-4-2001, therefore, the book profit has to be recomputed in accordance with the above clause (i) of Explanation 1 to section 115Jb of the Act – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Asseessee.
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