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2015 (7) TMI 770 - AT - Income TaxDisallowance of deduction under section 80 IB - exclusion of "duty drawback" from computation of "eligible profit" - Held that:- As per the judgment of Hon'ble Apex Court in Liberty India (2009 (8) TMI 63 - SUPREME COURT) export incentive in any form is not an income derived from industrial undertaking and these judgments of Hon'ble Apex Court in context of deduction u/s 80HHC cannot help the assessee in a case where the dispute is with regard to allowability of deduction u/s 80IB because the allowability of deduction u/s 80IB in respect of export incentive is squarely and directly covered against the assessee by the judgment of Hon'ble Apex Court in Liberty India (supra) and therefore, there is no merit in the synopsis filed by the assessee - Decided against assessee. Disallowance u/s 14A - Held that:- Assessing Officer has added the total investment in share of ₹ 1,86,74,948/- as on 31/03/2009 for working out the disallowance. Admittedly, this investment amount includes two investments in foreign subsidiaries and since the dividend income from these two investments is not exempt, this investment should not be included in the amount of investment for the purpose of making disallowance u/s 14A of the Act. To this extent, we find force in the contentions of Learned A.R. of the assessee and direct the Assessing Officer to recompute the disallowance u/s 14A of the Act after excluding the amount of investment in foreign subsidiaries. In respect of loans, it cannot be said that no part of these loans was used for making investment in shares because overall availability of own funds is different thing and the availability of own fund at the time of making investment in share is altogether different thing and if the assessee does not establish that on the date of making investment in share, own fund was available, it has to be accepted that mixed funds were used for making investment in share and as a consequence, disallowance u/s 14A as per formula prescribed in Rule 8D has to be made. We direct the Assessing Officer to recompute the disallowance after excluding the amount of investment in foreign subsidiaries. Decided in favour of assessee for statistical purposes.
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