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2014 (8) TMI 1161 - AT - Income TaxAllowable busniss expenditure - research and development expenditure - Held that:- Since no evidence has been filed regarding expenditure on research and development, therefore we decide this issue against the assessee. Addition u/s 40(a)(ia) - Held that:- Section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirements of the said provision exist. In that context, in our opinion the decision of the Special Bench of the Tribunal in the case of M/s. Merilyn Shipping & Transports vs. ACIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] does not lay down correct law. Previous year Expenses allowable in current year - Held that:- Previous year expenses could be allowed only if it is proved that such expenditure crystallized during the year. This fact has not been proved and therefore there is nothing wrong with the order of the CIT(A) and accordingly we confirm the same. Deduction u/s. 80IB on its Parwanoo Unit No. 2 - interest and other items cannot be said to have been derived from industrial undertaking Profits eligible for deduction u/s. 80IB - R & D expenses should be allocated on the basis of actual expenditure incurred. We therefore set aside the order of Ld. CIT(A) and direct the Assessing Officer to allocate the expenses actually incurred by the assessee on R & D in the eligible unit. Proportionate interest has to be disallowed because the assessee had admittedly diverted interest bearing funds to the sister concern Variations for deduction to be allowed u/s. 80IB - Held that:- after per using the order of the income tax authorities, we do not find that such burden has been discharged by the Assessing Officer so as to reject the profits declared by the assessee in the respective units. Therefore we are not inclined to uphold the order of assessment as made by the Assessing Officer. Quite clearly, the assessee brought out before the Assessing Officer as well as before the Ld. CIT(A) that the manner of maintenance of the records and the system of apportionment of impugned expenditure on the basis of the proportionate turnover of various units was accepted in the past and there no cogent reasons have been brought out by the revenue which would require departure from the same. Addition u/r 8D - Held that:- Rule 8D is not applicable in this year. Reasonable disallowance in this year is held to be ₹ 3 lakh and therefore we set aside the order of the CIT(A) and direct the Assessing Officer to disallow a sum of ₹ 3 lakhs. Disallowance u/s 14A - Held that:- We find that Hon'ble Bombay High Court in case of Godrej & Boycee [2010 (8) TMI 77 - BOMBAY HIGH COURT] has clearly held that rule 8D would be applicable from assessment year 2008-09, Therefore in this year rule 8D has to be applied and disallowance has to be made as per calculation of Rule 8D. Therefore we find nothing wrong with the order of Ld. CIT(A) and confirm his order. Addition invoking the provisions of section 145A - Held that:- Similar issue has been decided in favour of the assessee by the Hon'ble High Court of Punjab & Haryana in case of Nahar Spinning Mills Ltd. [2008 (2) TMI 316 - PUNJAB AND HARYANA HIGH COURT]. The Ld. CIT(A) following that decision decided the issue in favour of the assessee.
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