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2020 (10) TMI 1021 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - HELD THAT:- As relying on assessee's own case [2016 (6) TMI 1391 - ITAT AHMEDABAD] matter is set aside to the file of AO to examine the facts and figures of the case in the light of our observations made above in order to arrive at a final conclusion as to whether disallowance u/s 14A is to be made and if so, then the amount thereof which in no case should exceed the exempted income earned by assessee during the year under appeal. Nature of expenses - guarantee commission - DR contended that the fact whether such guarantee fees was paid with respect to the loan which was utilized for the capital working progress which was not put to usein the year under consideration is to be verified accordingly, if that be so, the amount of guarantee commission needs to be capitalized - HELD THAT:- As assessee did not prefer any appeal against the order of CIT(A) for the Assessment Year 2008-09. Assessee was not aggrieved by the direction of CIT (A) to verify the claim of the assessee whether such guarantee fees relates to the capital work in progress for the AY 2008-09. But the assessee for the year under consideration has challenged the direction of CIT-A verify whether such guarantee fee relates to the capital working progress. As the assessee did not challenge such direction of CIT(A) for the assessment Year 2008-09 before the ITAT, it implies that such direction has reached to its finality for that assessment year. Therefore, there was no dispute for the ITAT for the AY 2008-09 for the direction issued by the Learned CIT(A). Accordingly, it cannot be inferred that the order of the Learned CIT(A) for the Assessment Year 2008-09 has merged with the order of ITAT insofar the direction issued by CIT(A) to verify the claim of the assessee for the guarantee fees whether such fees relates to the capital work in progress. Accordingly, it cannot be said that the issue raised by the assessee is a covered issue by the order of the ITAT in the own case of the assessee for the Assessment Year 2008-09 as contended by the ld. AR for the assessee. Grounds of appeal of the assessee and the Revenue are dismissed. Disallowance on account of depreciation not eligible at the rate 60% being computers - As per the AO, the assessee is eligible to claim depreciation at the rate of 15% on the computerized plant and machinery and not 60% on the same - HELD THAT:- From the preceding discussion, there is no ambiguity that the Learned CIT (A) has decided the issue on hand after relying on the order of his predecessor for the Assessment Years 2008-09 which was subsequently set aside to the AO for fresh adjudication [2016 (6) TMI 1391 - ITAT AHMEDABAD]. We are incline to set aside the issue to the file of the AO for fresh adjudication as per the provisions of law and in the light of the direction issued by the ITAT for the Assessment Year 2008-09 which is reproduced here in above. Hence, the ground of appeal of the assessee is allowed for the statistical purposes. Disallowance under the provisions of Section 14A read with Rule 8D while determining the income under the provisions of MAT - HELD THAT:- Disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction in the case of CIT Vs. Jayshree Tea Industries Ltd. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT]. We direct the AO to make the disallowance of 1% of the exempted income as discussed above under Clause (f) to Explanation-1 of Sec. 115JB of the Act. We also feel to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the Clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we note that there is no mechanism provided under the Clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently. Therefore, our action for restoring back the issue to the file of AO would unnecessarily cause further litigation. Thus,in the interest of justice and fair play we limit the disallowance on an ad-hoc basis @ 1 % of the exempted income as per the Clause (f) to Explanation-1 of Sec. 115JB of the Act. Thus, the ground of appeal of the assessee is partly allowed. Addition being 15% of the grant received by the assessee - HELD THAT:- Grants received cannot be treated as income of the assessee company. Treating the interest income - business income OR income from other sources - HELD THAT:- Revenue has failed to controvert the aforesaid contention and the findings of the ld. CIT(A),therefore after considering the material fact that interest earned on loan and advances from deposit placed with Mega Power Project towards its sharing of power and interest of UL pool account received from M/s. Power Grid Corporation India Ltd were directly related to the business of the assessee therefore, this ground of appeal of the Revenue stands dismissed.
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