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2015 (1) TMI 560 - AT - Income TaxInterest income - whether taxed under the head ‘Income from other sources’ instead of adjusting it against the interest expenditure capitalized to Incidental Expenditure during Construction (EDCP) account? - Held that:- Following the decision of the Tribunal in the assessee’s own case we restore the issue to the file of the AO with a direction to examine the nexus between interest paid on borrowed funds and decide the issue in terms of the above reproduced directions given by the Tribunal for earlier assessment year. - Decided in favour of assessee by way of remand. Disallowance of expenditure u/s. 14A - Held that:- Perusal of the assessment order reveals that the AO has not followed the guidelines of objective satisfaction. He without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act. The learned CIT(A) also ignored the mandate of the provisions of section 14 A, while confirming the disallowance. Thus restore this issue back to the file of the AO with a direction that the AO will give opportunity to the assessee to place on record all the relevant facts including its accounts and then examine the computation/calculation made in this regard by the assessee having regard to the accounts of the assessee. - Decided in favour of assessee by way of remand. Deduction u/s. 80IB on the Technology Up-gradation Fund [TUF] subsidy denied - Held that:- After considering the arguments of both the sides, we deem it proper to set aside this particular issue to the file of the AO with the direction to examine whether the reimbursement of interest cost is reimbursement of revenue expenditure debited to the P & L Account of that eligible unit to that extent either in this year or in any earlier years. If it is so then due to reimbursement the expenditure incurred by the assessee is reduced, to the extent the profit of the industrial undertaking will increase. - Decided in favour of assessee by way of remand. Deduction u/s. 35AC disallowed - Held that:- Restore this issue is also restored to the file of the AO with a direction that the assessee will produce necessary evidence regarding the deduction claimed on this issue before the AO and the AO after proper verification of the same, if found genuine, will allow the claim of the assessee.- Decided in favour of assessee for statistical purposes. Addition made by AO on the basis of loose paper impounded - Held that:- CIT(A) after going through the evidences on file has held that the addition on this account was not sustainable as all the payments were made through account payee cheques and were duly reflected in the books of accounts. He however has rightly directed to reduce the amount of ₹ 65 lakhs from the value of assets and calculate the depreciation accordingly. We do not find any infirmity in the order of the CIT(A). It is accordingly upheld. - Decided against revenue. Computation of disallowance made u/s. 14A for computing book profit u/s. 115JB - Held that:- The expenditure found disallowable under section 14A can be added back while computing book profits under section 115 JB of the Act. Since in the case in hand, we have restored the issue of disallowance u/s 14A of the Act to the file of the A.O., hence, it is held that whatsoever expenditure would be found by the AO as disallowable under section 14A, the same can be added back while computing book profit under section 115JB in the case of the assessee.- Decided in favour of assessee TUF subsidy received - revenue v/s capital receipt - Held that:- Since this issue was not examined by the AO at all, we admit the additional ground and restore the matter to the file of the AO to examine the claim afresh. - Decided in favour of assessee by way of remand.
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