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2018 (11) TMI 1715 - AT - Income TaxDeduction u/s 80IB - claim disallowed on the ground that profit from hedging of menthol oil in the commodity exchange did not have a nexus with the manufacturing activity of the Jammu unit and is not eligible for deduction - HELD THAT:- As decided in own case [2017 (11) TMI 181 - ITAT MUMBAI] issue of profit from hedging of menthol oil in the commodity exchange was treated as business income - we uphold the order of the Ld.CIT(A) in holding that he hedging loss is the business loss in the case of the assessee not a speculation loss. Grounds raised by the Revenue on this issue are dismissed - CIT-A rightly allowed the deduction Disallowance towards expenditure incurred towards maintenance of business units at Daman - said unit has already closed its business activity in F.Y. 2005-06 and no manufacturing activity was being carried on/conducted at the Daman unit - HELD THAT:- As decided in own case [2017 (11) TMI 181 - ITAT MUMBAI] issue in favour of the assessee by directing the AO to allow the said expenditure for computing the income of the assessee. The co-ordinate bench of the Tribunal has held that the expenditure incurred by the assessee in normal maintenance of the business has to be allowed in spite of closure of the operation of the unit. We, therefore, respectfully following the same, direct the AO to allow the said expenditure. Accordingly, we uphold the order of Ld. CIT(A) by dismissing the ground of the revenue. Addition under section 14A of the Act read with Rule 8D - HELD THAT:- So far as the disallowance under rule 8D2(ii) is concerned, there is fault or infirmity in the order of Ld. CIT(A) as the Ld. CIT(A) has recorded a finding that assessee’s own funds were far more than the interest free funds available with the assessee and the Ld. CIT(A) has relied on the decision of “CIT vs. Reliance Utilities and Power Ltd.” [2009 (1) TMI 4 - BOMBAY HIGH COURT] . On the disallowance under rule 8D2(iii), we find that the co-ordinate bench of the Tribunal in the assessee’s own case [2017 (11) TMI 181 - ITAT MUMBAI] directed the disallowance of 5% of the dividend income which is as per the decision of the co-ordinate bench of the Tribunal in assessee’s own case in earlier year. - We direct the AO to make disallowance at 5% of the exempt income under rule 8D2(iii). To sum up the order of CIT(A) is affirmed on deletion of disallowance under Rule 8D2(ii) while the disallowance under rule 8D2(iii) is to be made at 5% of the exempt income. The ground is partly allowed. Disallowance u/s 14A to the book profit u/s 115JB - HELD THAT:- We find that the issue involved in the present case is covered by the decision of the Special Bench in the case of ACIT vs. Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein the Special Bench has held that the computation under clause f of explanation 1 to section 115JB sub section (ii) is to be made without resorting to the computation as contemplated under section 14A read with rule 8D. We, therefore, following the same direct the AO decide the issue in terms of the special bench decisions as stated above.
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