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2016 (8) TMI 1496 - AT - Income TaxDeduction of the profit derived from industrial undertaking u/s 80IC - substantial expansion carried out by the assessee in the 6th year of the new industrial undertaking - Claim restricted to 25% - HELD THAT:- As relying on own case [2015 (6) TMI 725 - ITAT CHANDIGARH] we hold that the assessee before us is entitled to only 25% of deduction during the present year because the assessee has already availed the period of full deduction @ 100% in the earlier five years i.e. from assessment years 2004-05 to 2008-09. In this background, we find nothing wrong with the order of Ld. CIT(A) and we uphold the same. Accordingly, assessee”s appeal is dismissed. Disallowance u/s 14A r.w.r. 8D - assessee applied provisions of Rule 8D and has not considered any interest disallowance holding that no interest expenditure is related to exempt income earned by the assessee - HELD THAT:- It is the duty of the revenue to establish nexus of the funds that assessee has used the interest bearing funds for the purposes of earning exempt income to make any disallowance u/s 14A with respect to interest expenditure. As AO has not established the nexus about investment of interest bearing funds in exempt income generating apparatus, no disallowance u/s 14A rwr 8D can be made on account of interest expenses. Reverse the finding of the ld CIT (A) in confirming the disallowance on account of interest expenses u/s 14 r.w.r. 8D of the Income tax Rules. Regarding the issue of other expenses we confirm the finding of the ld CIT (A) in confirming disallowance - out of total disallowance on account of interest expenses stands deleted andon account of other expenditure is confirmed. In the result ground of the appeal is partly allowed..
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