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2019 (8) TMI 1472 - AT - Income TaxDisallowance of deduction u/s.80IA (4) - whether the income of container freight station is eligible for deduction u/s.80IA (4) ? - HELD THAT:- Both the parties mutually agreed at the time of hearing that this issue is covered by the decision of Hon’ble Supreme Court in the case of CIT vs. Container Corporation of India Ltd. [2018 (5) TMI 359 - SUPREME COURT] wherein it was held that container freight station is eligible for deduction u/s. 80IA (4) of the Act. Since the facts recorded by the ld. CIT(A) in his order are not in dispute before us, respectfully following the aforesaid Supreme Court decision which is also not disputed by the parties before us, the grounds raised by the revenue for the A.Y.2007-08 are dismissed. Disallowance made u/s.14A r.w.r. 8D - HELD THAT:- It is not in dispute that assessee has not claimed any exempt income during the year under consideration. Despite this fact the assessee had voluntarily disallowed a sum of ₹ 40,000/- on an adhoc basis in the return of income. We find now the issue is well settled that when there is no exempt income claimed by the assessee, the disallowance u/s.14A of the Act would not come into operation. Accordingly, we direct the ld. AO to delete the disallowance made u/s.14A. Assessment u/s 153A - Disallowance of staff welfare expenses, entertainment expenses, miscellaneous expenses - original assessment completed u/s.143(3) - HELD THAT:- We find that these disallowances of expenditure in the total sum of ₹ 7 lakhs were originally made by the ld. AO in the original assessment completed u/s.143(3) of the Act dated 24/05/2010. The assessment which is in challenge before us is the assessment framed u/s.143(3) r.w.s. 153A of the Act dated 07/03/2014 pursuant to the search carried out in the case of J M Baxi Group on 20/03/2012. At the time of hearing, no arguments were advanced by the ld. AR with regard to these disallowances and accordingly, the same are dismissed. Disallowance of deduction u/s.80IA - rental income and interest on FDR as not derived from the industrial undertaking - HELD THAT:- We find that interest income of FDR’s were not made with inextricable link with the business of the assessee and the ld. AR fairly stated that the same is not eligible for deduction u/s.80IA of the Act. Accordingly, we uphold the action of the ld. CIT(A) in this regard. Rental income - AR fairly admitted that let this fact be examined by the ld. AO and the issue be decided accordingly. Per contra, the ld. DR vehemently objected to setting aside of this issue to the file of the ld. AO as assessee itself had classified the receipt as rental income. We find that assessee had given a detailed note supra explaining the nature of transaction which requires to be examined. It is well settled that substance of the transaction would always prevail over its form. Accordingly, we deem it fit and appropriate, in the interest of justice and fair play, to remand this issue to the file of the ld. AO for denovo adjudication.
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