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2018 (6) TMI 958 - AT - Income TaxDisallowance u/s. 14A read with Rule 8D - Held that:- The impugned order of the Ld. CIT(A) in deleting the addition as made by the AO under Rule 8D(2)(ii) of the Rules. Coming to Rule 8D(2)(iii) of the Rules, we note that assessee had earned exempt income to the tune of ₹ 1.53 cr. However, the Ld. CIT(A) erred in relying on decision in Holcim India Pvt. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] wherein it was held that when there is no exempt income, no disallowance u/s. 14A of the Act is called for. Therefore, we set aside the order of Ld. CIT(A) on this issue and direct disallowance @ .5% on the dividend earning scrip as held by Coordinate bench in the case of REI Agro Ltd. Vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA]. Addition of notional interest on sticky loan - Held that:- We note the issue is squarely covered in favour of the assessee by the decision in assessee’s own case as held addition of notional interest on sticky loans was not warranted by disregarding that the assessee followed mercantile system of accounting and as per accounting standard interest accrued should have been recognized on accrual basis Addition on account of depreciation on plant and machinery and other business assets purchased out of amount withdrawn from the credit available with NABARD - Held that:- We note the issue is squarely covered in favour of the assessee by the decision of Hon’ble jurisdictional High Court in assessee’s own case wherein d Tribunal very rightly confirmed the deletion of disallowance of the claim of the assessee to depreciation. Addition to the book profit computed u/s. 115JB of the Act on account of disallowance u/s. 14A - Held that:- It is reiterated that the disallowances made under the provisions of Sec. 14A r.w.s 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act. Therefore, the AO shall work out disallowances in terms of the clause (f) to Explanation-1 of Sec. 115JB of the Act independently after considering the expenses debited in the profit & loss account as mandated under the provisions of law. Accordingly, this issue of revenue’s appeal is allowed for statistical purpose.
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