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2019 (6) TMI 1374 - ITAT AHMEDABADTP Adjustment - non speaking order - silent in considering submissions of the assessee - HELD THAT: - The ld.CIT(A) reproduced grounds of appeal on page no.1 and 2, and thereafter reproduced submissions of the assessee upto page no.44. In other words, he has reproduced 40 pages of written submission given by the assessee, and thereafter concluded the finding in five-six lines. This order has been followed blindly in other years without any application of mind. Thus, it is a just non-speaking order at the end of the ld.CIT(A). Full Bench of the Hon’ble Punjab & Haryana High Court in the case of Roadmaster Industries of India P.Ltd. Vs. ACIT, [2006 (5) TMI 86 - PUNJAB AND HARYANA HIGH COURT] has considered large number of judgments at the end of Hon’ble Supreme Court as well as at the end of Hon’ble High Courts in order to propound why reasons are necessary in support of conclusions of any adjudicating authority. If we visualize written submissions and finding given by the ld.CIT(A), then it is apparent that such finding does not contain any adjudication on the submissions of the assessee and not sustainable. Therefore, we set side finding of the ld.CIT(A) on this issue in all three years and restore for readjudication. Deduction u/s 80HHC - HELD THAT:- Deduction u/s 80HHC is to be computed after reducing deduction allowed u/s 80IA and 80IB (b) excise duty and sales-tax are to be included in the total turnover for the purpose of calculating 80HHC as required under the formula, and (c) sale proceeds of DEPB licence is to be reduced from profit of the business to the extent of ₹ 4,89,81,959/-. For this purpose, the AO has relied upon the amendment brought in Finance Act, 2005 with retrospective effect. It was pointed out that this amendment has been held as unconstitutional by Hon’ble Gujarat High Court in the case of Avani Exports [2012 (7) TMI 190 - GUJARAT HIGH COURT] . The matter was set aside to the AO by the Tribunal with a direction to recompute the deduction in view of amendment by the Taxation Law. AO has passed a fresh assessment order on 30.12.2011. The ld.CIT(A) has taken cognizance of the decision of Hon’ble jurisdictional high Court which was rendered on 2.7.2012. Thus, the sale proceeds of DEPB licence are not required to be excluded from the profit of the business for calculating 80HHC. CIT(A) has followed the decision of the Hon’ble jurisdictional High Court, and there is no error in appreciating the facts and circumstances. Therefore, we do not find any merit in this ground of appeal. Addition u/s 14A - HELD THAT:- As far as the finding of the CIT(A) that disallowance cannot be made with help of Rule 8D is concerned, we do not find any error in his order, because Rule 8D has been made applicable w.e.f. 1.4.1981 [Hon’ble Bombay High Court judgment in the case of Godrej & Boyce vs. CIT, [2010 (8) TMI 77 - BOMBAY HIGH COURT] Whether the interest expenses could be allocated for disallowance of earning of exempt income - HELD THAT:- CIT(A) made an analysis and observed that the assessee has more surplus funds out of which it can be inferred that the investment was made - CIT(A) has made reference to the decision of Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]. We do not find any error in the order of the CIT(A) on this issue for placing this reliance as well as for holding that since the assessee was having more interest free funds, then the interest expenses cannot be carved out with help of formula given in Rule 8D. The ld.CIT(A) has rightly deleted the disallowance with regard to the interest expenditure is concerned. Disallowance worked by the CIT(A) is concerned, it is not on sound footing. The details of dividend income has been placed in tabular form and reproduced on page no.13 of the impugned order. According to the ld.counsel for the assessee these are old investments, and this year only activity relating to such exempt income is receipt of six cheques. There is no other activity which requires incurrence of expenditure. Estimation of expenditure at ₹ 12.51 lakhs is on the higher side. We scale down it to ₹ 1,50,000/- which can take care of all other necessary expenditure, if any, incurred by the assessee. In view of the above discussion, we do not find any merit in the ground raised by the Revenue. It is rejected.
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