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2021 (7) TMI 1073 - AT - Income TaxDisallowance u/s 14A r.w.r 8D(2)(iii) - HELD THAT:- AO has applied the formula of disallowance without considering the facts of investment pattern, income and total expenses. A.O. has to determine and calculate administrative over heads and compute the total income including exempt income. A.O. has to calculate the percentage of allocating administrative overheads based on total income and exempted dividend income. Further if the disallowance u/sec14A of the Act is worked out, the A.O. has to apply the ratio of special bench decision in the case of ACIT Vs. M/s. Vireet Investments Pvt Ltd. [2017 (6) TMI 1124 - ITAT DELHI] - Where the Coordinate Bench has made a distinctive observations on the investments and only dividend yielding investments has to be considered for the purpose of Average value of investments for disallowance u/s 8D(2)(iii). We set aside the order of the CIT(A) on this disputed issue and for limited purpose remit the disputed issue to the file of the assessing officer to recomputed the disallowance under Rule 8D(2)(iii) of the IT Rules and compare with the allocation of expenses to exempted income earned and allow the claim which is beneficial to the assessee. The assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. We allow the grounds of appeal of the assessee for statistical purposes. Disallowance computed applying Sec 14A and Rule 8D(2) of the I T Rules, the assessee is eligible to make adjustment of disallowance amount while claiming deduction U/sec80IA of the Act in computing the revised profits. Unabsorbed depreciation and accumulated losses of the earlier years prior to initial year of claim u/sec 80IA of the Act have to be adjusted while computing profit of eligible business - HELD THAT:- We Find the Honble High Court Of Madras in the case of M/s Velayudhaswamy Spinning Mills (P) Ltd. [2010 (3) TMI 860 - MADRAS HIGH COURT] has observed “The Loss in the year earlier to initial assessment year already absorbed against the profit of other business cannot be notionally brought forward and set off against the profits of the eligible business, as no such mandate is provided in section 80-IA(5)of the Act. Subsequently the Revenue has challenged the decision before the Hon’ble Supreme Court and the SLP was dismissed [2016 (11) TMI 373 - SC ORDER] . Accordingly, We follow the ratio of the above judicial decisions and set aside the order of the CIT(A) on this issue and allow the ground of appeal in favour of the assessee. Income tax refund order along with interest u/sec 244A - HELD THAT:- We consider the overall aspects and the ratio of decisions in respect of interest calculation. The assessee should not be deprived of its legitimate right for any further interest, due to the lapses on the part of the income tax department. Accordingly, we direct the assessing officer to grant the interest on refund to the date of refund order and allow this ground of appeal. Voluntary Emission Reduction (VER) credits - Revenue or capital receipt - HELD THAT:- Receipts in connection with the Voluntary Emission Reduction (VER) credits are in the nature of capital receipts - See M/S. DODSON LINDBLOM HYDRO POWER PVT. LTD. [2019 (4) TMI 1034 - BOMBAY HIGH COURT] and M/S. MY HOME POWER LTD., [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] Capital gain on Sale of Non convertible debentures - assessee has claimed the cost of acquisition of debenture at ₹ 452/- as against as cost of ₹ 500/- while calculating the capital gains - HELD THAT:- As in the subsequent A.Y.2010-11, the assessee has written off in the financial statements, we are of opinion that this matter requires verification and examination of transactions as discussed above to be decided based on the final outcome of A.Y. 2010-11.Accordingly, we restore this disputed issue for verification and examination by the assessing officer and after satisfaction of facts, the assessing officer is directed to allow the claim of the assessee. The assesse should be provided adequate opportunity of hearing and shall co-operate in submitting the information and we allow this ground of appeal for statistical purpose. Grant deduction of education cess on income tax paid during the year - HELD THAT:- As relying on decision of M/s Sesa Goa Ltd Vs JCIT Panaji [2020 (3) TMI 347 - BOMBAY HIGH COURT] were the Honble High court has observed that the Education cess and Higher Education cess are liable for deduction in computing income chargeable under head of profits and gains of business or profession. We considering the ratio of decision discussed above, direct the assessing officer to allow the deduction of cess and allow the ground of appeal of the assessee.
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