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2015 (2) TMI 1330 - AT - Income TaxInterest income taxed under the head ‘Income from other sources’ - adjusting it against the interest expenditure capitalized to Incidental Expenditure during Construction (EDCP) account - HELD THAT:- As relying on own case [2013 (9) TMI 688 - ITAT MUMBAI] for the sake of consistency, 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. Disallowance of expenditure u/s. 14A - HELD THAT:- Hon’ble Bombay High Court in the case of “Godrej & Boyce Manufacturing Co. Ltd. Vs. DCIT” [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D cannot be applied retrospectively but is applicable from assessment year 2008-09. For the assessment years prior to A.Y. 2008-09, the disallowance under section 14A can be made by the AO on some reasonable basis, if, the AO is not satisfied with the correctness of the working made by the assessee in this respect. We therefore direct that the AO will consider the working given by the assessee and if he will be satisfied in that respect, no further disallowance will be required to be made. However, if the AO will not be satisfied with the working given by the assessee, then the disallowance be made on some reasonable basis after giving the assessee due opportunity of representing its case in this respect. Subject to our above observations, the order of the Ld. CIT(A) on this issue is upheld. Denial of deduction u/s. 80IB on the Technology Up-gradation Fund [TUF] subsidy received - HELD THAT:- As relying on own case [2013 (9) TMI 688 - ITAT MUMBAI] , 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. Therefore, to examine the interest claim out of the unit and its reimbursement by way of subsidy, the matter is restored to the file of the AO. He is directed to keep in mind the decision of the Hon'ble Gauhati High Court in the case of Mehalaya Steels Ltd. [2010 (9) TMI 679 - GAUHATI HIGH COURT] and allow the deduction under section 80IB accordingly if the nexus is established. Computation of disallowance made u/s. 14A for computing book profit u/s. 115JB - HELD THAT:- In view of the observations made above in the case of "Godrej Consumer Products Ltd." [2013 (11) TMI 1245 - ITAT MUMBAI] it is 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. Levy of interest u/s 234B - HELD THAT:- As decided in M/S CHARBHUJA INDUSTRIES PVT. LTD. [2014 (1) TMI 1623 - ITAT MUMBAI] no advance tax was payable on MAT computed u/s 115JB and accordingly, the interest u/s 234B and 234C cannot be levied for non-deposit of advance tax on MAT for the year under consideration. Hence, we delete the levy of interest u/s 234B and 234C in this case Entire TUF subsidy received - ground raised for the first time before us only - HELD THAT:- As decided in own case [2013 (9) TMI 688 - ITAT MUMBAI] 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 keeping in mind the principles laid down by the Hon'ble Supreme Court on the issue of subsidy and also other case laws.
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