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2021 (7) TMI 1242 - AT - Income TaxDeduction u/s 80IC - existence of multiple “initial assessment years” - AO has disallowed the claim of deduction of 100% u/s. 80IC of the Act on the ground that the initial assessment year is A.Y. 2004-05 and therefore, for the year under consideration the assessee is eligible for only 30% deduction - HELD THAT:- We find that the AO has simply misunderstood the amendment brought u/s. 80IC and further misunderstood “the substantial expansion” brought by the assessee from A.Y.2009-10. In our considered opinion in the light of the notification issued by the Ministry of Commerce and Industry and in the light of the amendment brought in the Act u/s. 80IC of the Act, the eligibility of 100% deduction would start from initial A.Y. 2009-10. We further find that the AO has allowed the deduction from A.Y.2009-10 to 2012-13 which is evident from the assessment orders of the relevant assessment years on record. In our considered view the AO was not correct in disturbing the claim in the 5th year when earlier assessment years has not been disturbed. Hon’ble Supreme Court in the case of PCIT Vs. Aarham Softronics [2019 (2) TMI 1285 - SUPREME COURT] has decided this controversy in favour of the assessee and against the revenue. Disallowance u/s.14A - sufficiency of own funds - CIT(A) found that assessee had sufficient own funds to meet the investment and therefore, there was no reason for the disallowance of interest on borrowed capital and accordingly deleted the disallowance - HELD THAT:- As interest free funds (own funds) available with the assessee is far in excess of the investment in share. Therefore, following the ratio laid-down in the case of HDFC Bank Limited [2014 (8) TMI 119 - BOMBAY HIGH COURT] and Reliance Utilities and Power Limited [2009 (1) TMI 4 - BOMBAY HIGH COURT], we do not find any error or infirmity in the findings of the CIT(A) ground No. 3 and 5 are dismissed.
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