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2018 (1) TMI 1614 - AT - Income TaxDisallowance of deduction under 80-lC for Ferro unit, since the assessee failed to make any substantial expansion - HELD THAT:- As decided in own case CIT(A) has rightly come to the conclusion that in respect of unit which claimed deduction earlier u/s 80IB of the Act such unit will continue to get the benefit of deduction of 80IC of the Act subject to the limitation of ten year period. The deduction for an undertaking making substantial expansion of the existing undertaking is not applicable in the case of the assessee. We are of the view that the conclusions drawn by CIT(A) on this issue are fully justified and does not call for any interference. Accordingly this appeal of the revenue is dismissed. Disallowance of deduction under 80-lA for CFS (Sonai) Kolkata,( an infrastructural facility) - HELD THAT:- As decided in own case there remains no ambiguity with regard to the fact that assessee is engaged in CFS which is an infrastructure facilities as envisaged u/s 80IA of the Act. The deduction was denied by the AO on the ground that assessee is not engaged in the business of development of infrastructure facilities. However, after examining the above stated facts we find that the assessee has taken a land on lease for setting up the infrastructure facilities at KP and has incurred the cost for its development. Therefore, we hold that the assessee has set up the CFS facility and operating the same and accordingly eligible for claiming the deduction u/s. 80IA of the Act. In the light of above reasoning, we hold that the order of the Ld. CIT(A) is correct - Decided against revenue. Disallowance of deduction under 80lA for CFS (JJP) Kolkata (infrastructural facility) - AO has denied the deduction on the ground that assessee is not engaged in business of infrastructure facilities - HELD THAT:- ssessee is engaged in CFS which is an infrastructure facilities as envisaged u/s 80IA of the Act. The deduction was denied by the AO on the ground that assessee is not engaged in the business of development of infrastructure facilities. However, after examining the above stated facts we find that the assessee has taken a land on lease for setting up the infrastructure facilities at KP and has incurred the cost for its development. Therefore, we hold that the assessee has set up the CFS facility and operating the same and accordingly eligible for claiming the deduction u/s. 80IA of the Act - Decided against revenue. Disallowance of lease rent amortization - proportionate deduction was claimed by assessee u/s 37(1) of the Act after the commencement of its business - HELD THAT:- We find that the CBDT has issued a Circular 9/2014 dated 23.04.2014 wherein the impugned expenditure was allowed over the lease period after the commencement of business. In the case where an assessee has claimed any deduction out of initial cost of development of infrastructure facility of roads/highways under BOT projects in earlier year, the total deduction so claimed for the Assessment Years prior to the Assessment Year under consideration maybe deducted from the initial cost of infrastructure facility of roads /highways and the cost ‘so reduced’ shall be amortized equally over the remaining period of toll concessionaire agreement. This Circular is applicable only to those infrastructure projects for development of road/highways on BOT basis where ownership is not vested with the assessee under the concessionaire agreement - Decided against revenue. Disallowance u/s 14A read with Rule 8D - Non recording of satisfaction - assessee has earned dividend income which is exempted from tax though the assessee has made a disallowance - HELD THAT:- No defect of whatsoever was pointed out by the AO at the time of assessment proceedings. Rather the AO had resorted to the provision of Rule 8D of the Rule for the purpose of disallowance. However, the provision of law requires the AO before resorting to the disallowance has to record the satisfaction after referring the books of account of the assessee. But in the instant case, the AO has failed to do so. Therefore, we hold that the AO has passed his order against the provision of law. We draw support from judgment of Hon'ble Delhi High Court [2015 (3) TMI 155 - DELHI HIGH COURT] wherein it was held that without recording satisfaction there could be no question of disallowance u/s 14A read with Rule 8D. Besides the above, we find that there was sufficient fund available with the assessee. Therefore any inference can be drawn that the impugned investment was made out own fund of assessee - Decided in favour of assessee.
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