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2022 (1) TMI 1152 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - investments generate exempt-income in the form of dividend or share in profit from firm - whether the disallowance is attracted even when the underlying investment has not yielded any exempt-income during the relevant previous year? - CIT-A deleted the addition - HELD THAT:- As section 14A / Rule 8D is not applicable at all if there is no exempt-income earned during the previous year. Reverting back to the facts of the assessee, the parties have openly accepted that there was no exempt-income earned during the year from the underlying investments. Being so, in view of above analysis of legal provisions, we observe that the Ld. CIT(A) has committed no error in deleting the disallowance made by Ld. AO u/s 14A read with Rule 8D. Therefore we dismiss the Ground No. 1 of Revenue. Not considering the decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] - It may be noted that in Maxopp Investment (Supra), the Hon’ble Supreme Court has decided only one specific issue, of course which goes in favour of revenue and against the assessee. The Hon’ble Court had turned down the argument that section 14A and Rule 8D are not applicable where the investment in shares is made as a part of strategic objective - Hence the Revenue is wrong in Ground No. 2 to urge that the Ld. CIT(A) has not considered the decision in Maxopp Investment (Supra). Therefore, this Ground No. 2 of the Revenue is dismissed. Disallowing additional claim of deduction u/s 32AC - HELD THAT:- We observe that the deduction u/s 32AC is a statutory deduction. Further the purpose of deduction is to incentivize the establishment of new manufacturing industry. Hence it would be better to construe the provision in a holistic manner. In view of above we accept this claim of assessee. However, since the details of qualifying assets are required to be verified, we send the matter back to the file of Ld. AO. AO shall give an opportunity to the assessee, verify the details of qualifying assets and allow deduction. Therefore, this ground of assessee is allowed for statistical purposes. New legal claim to be entertained by judicial authorities - deduction of the Cess on income-taxes paid and DDT paid - HELD THAT:- A new legal claim can be entertained by judicial authorities and the decision of Goetze (India) Ltd.2006 (3) TMI 75 - SUPREME COURT does not come in the way. It is for this reason that we admit this claim of assessee. However, since the details of claim is required to be verified, we send the matter back to the file of Ld. AO. AO shall verify the claim having regard to the judicial developments to be placed by assessee before him and take an appropriate conclusion. Therefore, this ground of assessee is allowed for statistical purposes.
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