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2019 (2) TMI 2078 - AT - Income TaxDisallowance of deduction u/s 14A - disallowance for interest on funds used for making the investment for earning the tax free income - HELD THAT:- As expounded that if the assessee has sufficient interest free funds to make the investment in tax free instrument, disallowance u/s. 14A cannot be done. Respectfully following the Hon'ble Jurisdictional High Court decision in the case of Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and CIT vs. HDFC Bank Ltd [2014 (8) TMI 119 - BOMBAY HIGH COURT] we remit the issue to the file of the A.O. to decide as per the Hon'ble Jurisdictional High Court’s decision as referred above. Deduction u/s. 35D - AO has disallowed the claim on the ground that the assessee has sold its Steel Division - HELD THAT:- We find that the ITAT on this issue vide order [2015 (12) TMI 1237 - ITAT MUMBAI] held that as perusal of section 35D shows that the Act is silent in the case when a unit is sold. There is no clause in the section which debars the assessee from claiming the expenses as a write off on sale of the undertaking. We, therefore, do not find any reason for declining the claim of the assessee - claim can be denied in the case of amalgamation and demerger but since the Act is silent in the case of sale of undertaking, in our understanding of the law, the Revenue authorities have erred in denying the claim. Decided in favour of assessee. Addition on account of annual value of the property - As per revenue determining the annual value @ 12% of the cost of land and building shall mean that the same annual value shall remain for eternity as the cost of the land and building will never change - HELD THAT:- As assessee’s contented that the direction should be given in accordance with the earlier year ITAT order that the annual value of the property should be 12% of the cost and the land and building, we note that it is the plea of the Revenue that making an annual value as a percentage of the cost of the land and building forever will lead to annual value fixed for eternity which can never be permitted. We find that the ITAT earlier had confirmed the same direction. The matter is already before the Hon'ble Jurisdictional High Court. We do not find any cogent reason to depart from the earlier order of the Tribunal in the assessee’s own case. Loss on compulsory conversion of u/s 64 - assessee submitted that the ITAT in the case of Schrader Duncan Ltd. [2012 (4) TMI 394 - ITAT MUMBAI] has dismissed the assessee’s appeal on similar issue and the Hon'ble Bombay High Court has admitted the said appeal - HELD THAT:- As we find that on the same issue, the ITAT has decided the case against the assessee and it is not the case that the Hon'ble Jurisdictional High Court has reversed the said decision. Respectfully following the same, we uphold the order of the ld. CIT(A). Deduction u/s. 80HHC - assessee has claimed deduction on DEPB - HELD THAT:- Assessee stated that this issue is covered in favour of the assessee by ITAT order for A.Y. 2003-04 and Topman Exports vs. CIT [2012 (2) TMI 100 - SUPREME COURT] - Decided in favour of assessee.
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