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2017 (5) TMI 1794 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - Expenditure incurred to earn exempt income - HELD THAT:- We respectfully follow the decision of the Coordinate Bench of this Tribunal for A.Y. 2010-11 [2017 (3) TMI 1051 - ITAT KOLKATA] and direct the Assessing Officer to restrict the disallowance under section 14A read with Rule 8D to the extent of exempt dividend income. Ground No. 1 of the assessee’s appeal thus is partly allowed. MAT computation - addition made on account of excise duty refund and interest subsidy while computing book profit under section 115JB - HELD THAT:- As relying on assessee own case [2017 (3) TMI 1051 - ITAT KOLKATA] we direct the Assessing Officer to delete the addition made on account of excise duty refund and interest subsidy while computing the book profit of the assessee-company under section 115JB of the Act and allow Ground No. 2 of the assessee’s appeal. Disallowance made under section 14A read with Rule 8D while computing the book profit of the assessee-company under section 115JB - HELD THAT:- As observed that this issue is consequential to the issue involved in Ground No. 1 of the assessee’s appeal for AY 2011-12, which has been decided by us in the foregoing portion of this order. Following our conclusion drawn in AY 2011-12 on the said issue, we direct the Assessing Officer to restrict the disallowance under section 14A read with Rule 8D to the extent of exempt dividend income. Ground No. 3 of the assessee’s appeal thus is partly allowed. Addition interest subsidy and excise duty refund in computing the income of the assessee under the normal provisions of the Act - HELD THAT:- As decided in own case [2017 (3) TMI 1051 - ITAT KOLKATA] incentives, designed to achieve a public purpose, cannot be construed as production or operational incentives for the benefit of assessees alone. It was further held that making of additional provision in the scheme that the incentives would be available to the eligible industrial units from the date of commencement of commercial production and that these are not to be allowed for creation of new assets cannot be viewed in isolation to treat the incentives as production incentives. Such provisions are intended to ensure that the incentives are made available only to the bona fide industrial units so that the larger public interest of eradicating unemployment is achieved. The Court finally concluded that the incentives received by way of excise duty refund and interest subsidy are capital receipts in the hands of the assessee and therefore not chargeable to tax. - Decided against revenue.
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