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2019 (2) TMI 1888 - AT - Income TaxDisallowance u/s 14A r.w.r.8D - suo moto disallowance made by assessee - HELD THAT:- Reference to the financial statement that the own funds held by the assessee are nearly 100 times of the corresponding investment and therefore, in view of the decision in India Gelatine & Chemicals [2015 (11) TMI 392 - GUJARAT HIGH COURT] no disallowance towards proportionate interest is justified. We are in total agreement with the plea on behalf of the assessee in view of the long line of judicial precedents on the issue. We thus direct the AO to restrict the disallowance under s.14A to the extent of ₹ 3,65,416/- as per Rule 8D(2)(iii ) of the ITAT Rules, 1962. The issue accordingly stands allowed. Maintainability of disallowance computed u/s 14A of the Act under normal provisions for the purposes of adjustments in book prof it as determined for the purposes of Section 115JB - HELD THAT:- The issue is squarely covered in favour of the assessee by the decision in Alembic Ltd. [2017 (1) TMI 513 - GUJARAT HIGH COURT] as well as Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI]. In view of the express judicial fiat available in this regard, the disallowance computed under s.14A cannot be imported for the purposes of adjustment in book profit u/s1 15JB of the Act. The issue raised by the assessee in this regard thus stands allowed. Additional depreciation in respect of air conditioner machines and finger recognition system - assessee submitted that the ai r conditioners were installed with the factory premises and the finger recognition system is for the supervision and control of the employees’ attendance - HELD THAT:- Both the assets are in the nature of plant and machinery and thus qualify for additional depreciation under s.32(1)(iia) of the Act. For this proposition, the learned AR for the assessee referred to the decision of Hon’ble Gujarat High Court in CIT vs. Nathubhai H Patel [2005 (11) TMI 49 - GUJARAT HIGH COURT] - We find force in the plea of the assessee noted above. The assessee cannot be denied additional depreciation in the facts narrated above. The aforesaid issue is thus settled in favour of the assessee. Interest subsidy is required to be treated as capital receipt of non-taxable nature - we find ourselves in total agreement with the contentions on behalf of the assessee for non chargeability of such capital receipts regardless of its treatment in books as revenue receipts. We are however conscious in same vain that the issue has been raised for the first time before the Tribunal. The Revenue authorities had no occasion to look into the relevant facts. We accordingly consider it expedient to restore the issue to the file of the AO for verification of relevant factual aspects towards quantum of receipt of interest subsidy and relevant documentation in this regard, if so considered necessary in the opinion of the AO.
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