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2019 (3) TMI 1917 - AT - Income TaxDisallowance u/s. 80IA - whether the amalgamating company i.e. Shanti Processing Ltd. was eligible for claiming u/s. 80IA? - HELD THAT:- CIT(A) in his findings that as per the provisions of section 80IA(12) when any undertaking of an Indian Company which is entitled to deduction under this section is transferred before the expiry of the period specified in this section to another Indian Company then as per clause (b) the provision of this section shall apply to the amalgamated Company as they would have applied to the amalgamating Company if the amalgamation had not taken place and the provisions of subsection (12) would only apply if the amalgamating Company was eligible for claiming deduction u/s 80IA. As demonstrated from the above facts and circumstances that the assessing officer has disallowed the claim of the assessee on presumption basis that addition was old plant and machinery without bringing on record evidence to substantiate that specified machinery was purchased by Shanti processor Ltd and the assessing officer has also failed to disproved the material fact that similar claim was allowed to the assessee in the assessment year 2009-10 on fulfilling of all the conditions. Disallowance u/s.14A - assessee had submitted that it had not used borrowed fund for making investment and accordingly no part of interest was required to be disallowed by invoking the provision of section 14A - HELD THAT:- After consideration of above facts and detailed findings in the order of the CIT(A), we are of the view that CIT(A) has rightly held that assessee was having ample interest free fund, therefore, no disallowance in respect of interest expenditure is to be made in the case of assessee by invoking the provision of section 14A of the act. CIT(A) has restricted the disallowance out of administrative expenditure to the extent of ₹ 2 lacs after taking into consideration the claim of the assessee that no administrative expenditure has been incurred in earing the exempt income. On this issue during the course of appellate proceedings before us, the ld. counsel has also placed reliance on the decision of Pr. CIT vs. Sintex Industries Ltd. [2018 (3) TMI 1448 - SC ORDER] - we observe that ld. CIT(A) has rightly restricted the disallowance of administrative expenditure to the amount of ₹ 2 lacs after taking into consideration the nature of investment made by the assessee and the nature of expenses incurred. Accordingly, we do not find any merit in this ground of appeal of the Revenue, therefore, the same is dismissed.
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