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2014 (11) TMI 1231 - AT - Income TaxDisallowance of deduction u/s 10B on miscellaneous income earned by the assessee from sale of scrap - Whether CIT(A) has erred in holding the miscellaneous income earned from sale of scrap as main business activity - HELD THAT:- It is not the case of AO that these incomes are assessable under some other head of income and not as income from business. Under these circumstances, we are of the considered opinion that the order of the first appellate authority has to be upheld by applying the decision of the special bench of the Tribunal in the case of Maral Overseas Ld. [2012 (4) TMI 345 - ITAT INDORE] where it is held that in the case of Liberty India 2009 (8) TMI 63 - SUPREME COURT the Hon’ble Supreme Court has dealt with the provisions of section 80IA/80IB of the Act and not section 10B where a formula has been prescribed u/s 10B(4), the application of which would result in arriving at the figure of profits and gains that are to be considered as derived by the 100% EOU, for the purpose of computing exemption u/s 10B (1) Thus a disallowance on the ground that a particular income is not derived from the business is bad in law as the same does not confirm to the formula prescribed under the Act. CIT(A) admitting an additional claim of the assessee - assessee has made a claim u/s 10B in the return of income - HELD THAT:- It is only a case where the claim u/s 10B was sought to be recomputed. It is not a fresh claim and hence in our view the judgment of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] does not apply. Be it as it may, this is a legal ground and all the facts relatable to this ground are on record. Thus in view of the decision of Hon’ble Supreme Court in the case of NTPC Ltd. [1996 (12) TMI 7 - SUPREME COURT] we do not find any infirmity in the action of the first appellate authority. As far as computation of relief u/s 10B is concerned the Ld. DR could not not controvert the factual finding of the Ld. CIT(A) and hence the same is upheld. Hence these two ground Nos. 3 & 4 are dismissed. Disallowance of interest on interest free loan advanced to a subsidiary company - HELD THAT:- Factual position is that the assessee had purchased shares of a subsidiary company for the purpose of having control over it. The amount in question is investment made and not a loan advanced. As there is no interest free loan given we uphold the findings in para 5.2 of the CIT(A) order and dismiss ground No. 1 of the revenue.
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