Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 5 - AT - Income TaxExemption u/s. 10A - Adjustment of brought forward business loss and unabsorbed depreciation - assessee has two units – one is STPI and other non-STPI unit. - HELD THAT:- CIT(A) has rightly allowed the appeal of the assessee by holding that the brought forward business loss and unabsorbed depreciation of non-eligible business unit is not allowed to be adjusted while calculating the exemption u/s. 10A - Following the law laid down in CIT vs. Yogokawa India Ltd. (2011 (8) TMI 845 - KARNATAKA HIGH COURT), deduction u/s 10A is required to be taken before setting off brought forward losses and unabsorbed depreciation. Disallowance u/s. 14A - HELD THAT:- Since, the appellant has been able to establish that none of the fund borrowed is diverted towards investment in Mutual Fund Units, the expenditure related to indirect expenses is not justifiable and hence the addition u/s 14A is deleted. Regarding disallowance under limb iii of Rule 8D, the appellant has not been able to explain why some expenditure related to management of such investment, income from which is exempted, should not be disallowed. Since the investment has been made, some amount of follow up actions, record keepings, discussions and consultations are bound to happen which will lead to some administrative expenses. Such administrative expenses are to be computed at the rate of 5% of average investment. In the case of appellant, the AO has computed such which is in accordance with the law and hence confirmed. - Decided against revenue.
|