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2016 (5) TMI 950 - AT - Income TaxClaim of deduction u/s 80IC - Assessing officer restricted the claim of deduction u/s 80IC @ 25% as against 100% claimed by the assessee - Held that - As relying on Hycron Electronics case 2015 (6) TMI 725 - ITAT CHANDIGARH assessee is entitled to only 25% of deduction during the present year because the assessee has already availed the period of full deduction @ 100% in the earlier five years - Decided against assessee Claim of Other Income being eligible for deduction U/s 80IC - Held that - Interest received on margin money is not entitled for deduction u/s 80IC and Accordingly we uphold the order of CIT(A) to this extent. We may also observe here that the issue relating to Misc. receipts and sundry credit balances returned back -was not seriously argued and pressed before us. Accordingly to the above extent we uphold the order of C IT(A). As regards the issue of foreign exchange fluctuation we are following the order of the Tribunal passed in assessment year 2010-11 and set aside the order of C IT(A) and remand the issue to the file of the Assessing officer to decide the issue as per the directions and guidelines given by the Tribunal in assessee s case in assessment year 2010-11. As regards the dividend we agree with the findings of the CIT(A) that dividend has to be specificall y charged under the head income from other sources u/s 56 of the Act. Furthermore in view of the decision of the Hon ble Supreme Court in the case of Pandian Chemicals Ltd Vs. CIT (2003 (11) TMI 23 - MADRAS High Court ) and Liberty India Ltd. Vs. C IT (2009 (8) TMI 63 - SUPREME COURT ) the dividend received by the assessee has no direct nexus with the profits and gains derived from the manufacturing activity and industrial undertaking. Hence this amount is not allowable for computation of profits for claiming deduction u/s 80IC of the Act. Disallowance u/s 14A - Held that - Hon ble Punjab & Haryana High Court in the case of C IT v Deepak Mittal (2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT)held that the disallowance u/s 14A requires findings of incurring of expenditure where it is found that for earning exempt income no expenditure has been incurred disallowance u/s 14A cannot stand. When the assessee claims that he had not made any expenditure on earning exempt income the Assessing officer in terms of sub section (2) of section 14A is required to collect such material evidence to determine expenditure if any incurred by the assessee in relation to earning of exempt income.In view of the above discussion we think it appropriate to set aside the findings of the CIT(A) on this issue and remand the matter to the Assessing officer with a direction to decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee.
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