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2017 (3) TMI 817 - AT - Income TaxDisallowance u/s 14A - as per assessee disallowance as per Rule 8D to be made by taking into consideration only those shares which have yielded dividend income in the year under consideration - Held that:- There was no documentary evidence submitted to prove that no borrowed fund was used in the impugned investments. Therefore, the submission made by the assessee with regard to the interest expenses. We find that no material was furnished before the AO at the time of assessment proceedings. It was the duty of the assessee to provide necessary information to justify that there is no borrowed fund utilized in the impugned investments. Thus, in such circumstances the AO had no option except to resort to the provisions of section 14A read with rule 8D of Income Tax Rules. As relying on REI Agro Ltd. v. Dy. CIT [2013 (9) TMI 156 - ITAT KOLKATA] we direct the Assessing Officer to compute the disallowance as per Rule 8D by taking into consideration only those shares, which have yielded dividend income in the year under consideration. The alternative contention of the assessee is accordingly accepted. Reducing compensation received from the actual cost of the plant & machinery - allowing depreciation thereon though the receipt is capital in nature & consequently not chargeable to tax - Held that:- In the instant case before us compensation was given due to non-performance of the machineries at desired level. Therefore the compensation in the instant case before us cannot be treated as capital receipts. Similarly the finding of the ld CIT(A) that the compensation received by the assessee should be reduced from the actual cost is not based on correct law. It is because the cost of the machine has not been met directly or indirectly by the government or any other person as required in Explanation 10 to section 43(1) of the Act. In fact the compensation was given with the sole purpose of reducing the loss which might have incurred by the assessee due to non-performance of the machineries at desired level. At the time of purchase of machineries there was no whisper about the meeting of the cost directly or indirectly by the machine supplier. Therefore, in our considered view the question of reducing the actual cost of machinery does not arise. Hence the ground of appeal of the revenue is allowed Addition on the basis of additional evidence - Held that:- At the outset, we find that the necessary details were filed by the assessee at the time of assessment as evident from letter submitted to the AO which is placed at page 14 of the paper book along with sample supporting documents. Therefore the ground of the Revenue that the fresh evidences were submitted is not tenable. Thus we are of the view that no fresh evidences were submitted before the ld. CIT(A). Accordingly we find no infirmity in the order of ld. CIT(A). Hence the ground raised by the Revenue is hereby dismissed.
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