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2019 (2) TMI 1617 - AT - Income TaxDisallowance of deduction u/s 80IE claimed in respect of profits derived by four tea gardens on the premise that the expansion program in respect of these four tea gardens took place over a period of more than one financial year - AO had disallowed the assessee’s claim for deduction u/s 80IE in respect of tea garden on the ground that increase in the investment in the plant & machinery by more than 25% of the book value was carried out in more than one financial year - HELD THAT:- This Tribunal after examining the provisions of Section 80IE recorded a categorical finding that nowhere the said Section mandated that the substantial expansion once commenced should be completed within the same financial year. The coordinate Bench of this Tribunal therefore did not find merit in the Revenue’s objection that for claiming deduction u/s 80IE it was necessary for the assessee to achieve the substantial expansion within one financial year. Respectfully following the aforesaid decision in the case of Jayshree Industries Ltd Vs Jt. CIT [2018 (4) TMI 1511 - ITAT KOLKATA] , we reject Ground No. 1 of the Revenue. Interest income under the head ‘Business’ - interest income earned by the assessee from FDs and financial institutions had no nexus with the assessee’s business of growing & manufacturing tea - HELD THAT:- As decided in assessee's own case since assessee paid interest on loans and also derived interest on deposits, the interest received had to be netted off against interest payment and only the net interest expenditure could be considered in computing the composite income of growing & manufacture of tea. Disallowance of deduction claimed u/s 80IE in respect of eight tea gardens on the premise that substantial expansion in respect of these gardens was carried out over more than one year - HELD THAT:- In the AY 2010-11, the AO had disallowed the deduction claimed in respect of four tea gardens, namely Moran, Paneery, Mona bari and Mijicajan. In the AY 2011-12, besides disallowing the claim in respect of the foregoing four tea gardens, the AO disallowed the claim made in respect of tea gardens at Phillobari, Rajmai, Nyagogra & Dehing which had completed the expansion in the relevant previous year and the deduction was first claimed in the year under consideration. The reasons for making the disallowance in the year under consideration are same as discussed in the assessment order for AY 2010-11. CIT(A) was also passed on identical lines on which the relief was allowed in the appellate order for AY 2010-11. Therefore, following our conclusions drawn in A.Y. 2010-11, we dismiss this Ground raised by the Revenue and uphold the order of Ld. CIT(A).
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