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2019 (11) TMI 692 - AT - Income TaxDisallowance of expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with Rule 8D2 of the Rules while computing book profit under section 115JB - HELD THAT:- CIT(A) noted that the AO has rightly disallowed expenses relatable to exempt income amounting to ₹ 2,03,95,311/- by invoking the provisions of section 14A of the Act read with Rule 8D of the Rules, while computing book profit under section 115JB of the Act in view of provision of clause (f) of explanation (1) to section 115JB of the Act. We noted that this issue is squarely covered by the decision of special bench of this tribunal in the case of ACIT vs. Vireet Investments (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein, it is held that the provisions of section 14A read with Rule 8D of the Rules does not apply while computing book profit under section 115JB of the Act. Hence, respectfully following Special Bench decision in the case of Vireet investment (supra), we delete the disallowance and allow this issue of assessee’s appeal. Disallowance u/s 14A - HELD THAT:- We noted that the CIT(A) has categorically admitted that here is no satisfaction recorded in the assessment order while referring to the provisions of section 14A of the Act read with Rule 8D(2) of the Rules. We noted that this issue is squarely covered in favour of assessee and against Revenue by the decision of Supreme Court in the case of Maxopp Investment Ltd. vs. CIT [2018 (3) TMI 805 - SUPREME COURT] . However, this issue also covered by the decision of Hon’ble Bombay High Court in the case of Godrej & Boyce Manufacturing Company Ltd vs. DCIT [2017 (5) TMI 403 - SUPREME COURT] . As this issue is squarely covered in favour of assessee and against the Revenue, hence, we delete the disallowance only on the issue of non-recording of satisfaction for invoking the provisions of section 14A of the Act read with Rule 8D of the Rules. Hence, this issue of assessee’s appeal is allowed. Depreciation of UPS @ 15% treating the same as part of plant and machinery, as against the claim of depreciation of the assessee @ 60% as part of the computer - HELD THAT:- Depreciation allowed at the rate of 60% on UPS Deduction u/s 80IA as certified in form No. 10 CCB in respect of infrastructure facility in the nature of Rail System developed, operated and maintained by assessee - HELD THAT:- Additional grounds relating to Sale tax exemptions, income from receipt of sale of carbon credit which arising out of the accounts of the assessee are part of the proceedings of the assessment with regard to the accounts of the assessee including the audit report. Further, in regard to claim of deduction under section 80IA of the Act i.e. regarding infrastructure facility development, operated and maintained by the assessee in regard to the development of integrated Rail System between its system manufacturing plant and the nearest railway station of the Indian Railways for inward and outward movement of goods for efficient and cost effective transportation to and from various destination is also part of the audit report which is also part of the assessment records. In our view these additional grounds are to be admitted and to be adjudicated. Since, the below authorities have not gone into the details and verification of documents, these are admitted and set aside to the file of the AO for adjudication in term of the law. Hence, these three additional issues are admitted and the matter remanded back to the file of the AO.
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