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2020 (9) TMI 403 - AT - Income TaxLoss incurred in future trading as a speculation loss - HELD THAT:- The issue is covered against the assessee by the decision of CIT vs. DLF Commercial Developers Ltd [2013 (7) TMI 334 - DELHI HIGH COURT] and therefore, declined to entertain the plea taken by the assessee. Ld. CIT(A) accordingly dismissed this ground of appeal - unless and until there is change in the facts and circumstances or in the law holding the field, we find it difficult not to follow the decision of the jurisdictional High Court. - Decided against assessee. Disallowance under 14A of the Act read with Rule 8D - HELD THAT:- We set aside the findings of the authorities below on this issue and remand the issue back to the file of AO for considering the extent of own funds of the assessee for investment in the shares and in case the whole funds of the assessee in the shape of share capital and Reserves & Surplus exceeds the investment in the current year, the question of interest component under rule 8D(2)(ii) of the Rules does not arise. We direct AO to verify the investments yielding exempt income and to reach the correct amount of disallowance keeping in view the decision of ACB India Ltd [2015 (4) TMI 224 - DELHI HIGH COURT]. Disallowance u/s 10AA - Assessee claimed unit situated at Noida, SEZ is engaged in the manufacture and export of articles and things; that such unit commenced production from the financial year 2008-09 and has been 100% export oriented unit; and therefore, the profit of the unit is eligible for exemption under section 10AA - HELD THAT:- There does not seem to be anything illegality or irregularity in the observations of the authorities below as to certain expenses relating to the key man insurance, basic salary of Directors, audit fees, tax audit fees and certification, taxation matters and Directors meeting fee etc. No doubt the Directors do not work for head office alone. The fact that they also oversee the work of the exempt unit, makes it obligation on the part of the exempt unit to contribute to such expenditure. So also, in respect of the other expenditure, other than the one which was separately accounted for in the books of NSEZ. Authorities below missed to notice the contention of the assessee that the expenses relating to transit goods insurance and Diwali expenses in respect of NSEZ were separately claimed in the books of NSEZ and therefore, the question of allocation of such expenses does not arise.This fact needs to be verified. Authorities below noted that at the end of the year the profit of the unit is also transferred to the head office. In such case, the funding of the exempt unit by the head office by incurring interest expense does not arise. Since the learned Assessing Officer did not consider this aspect, it is now necessary for us to direct him to do so. No portion of common expenditure is allocable to the NSEZ in respect of such expenditure as was entered by the NSEZ in its own books of accounts. AO shall verify whether the head office is holding the profit of the NSEZ which is transferred to it at the end of every year out of which certain funds are provided to the NSEZ for its operations. If it be so, no portion of interest expense incurred by the head office is allocable to the NSEZ to the extent of the funds which are not provided to the NSEZ by the head office by incurring interest expenditure. For this purpose and to this extent, we set aside the impugned order and remand issue to the file of the learned AO. Appeal of the assessee is allowed in part and for statistical purpose.
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