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2022 (7) TMI 953 - AT - Income TaxAddition u/s 14A r.w.r. 8D - HELD THAT:- As regards the disallowance under limb (2) of 8D, it is an undisputed position that the investments are made in the earlier year 2007-08, where the CIT(A) has rendered a categorical finding that the investments were made out of interest free funds of the assessee company and no disallowance of interest under rule 8D(2)(ii) is required. Thus, findings of CIT(A) are not under challenge before us. In the circumstances, we hold that no disallowance of interest u/s 14A read with rule 8D(2)(ii) is warranted. Disallowance under rule 8D(2)(iii), for the purpose of computing the average value of investments, only the investments which yielded exempt income alone has to be considered - Hon’ble Special Bench in the case of Asstt. CIT Vs. Vireet Investment (P) Ltd., [2017 (6) TMI 1124 - ITAT DELHI] has held that while computing the amount of disallowance under sub clause (iii) of sub-rule (2) of Rule 8D of the Rule, the value of investment which yielded exempt income alone has to be considered for the purpose of arriving at average value of investment We find merit in the submissions made on behalf of the assessee that the amount of investment which yielded exempt income alone should be taken into consideration for the purpose of arriving at average value of investment as envisaged under sub clause (iii) of sub-rule (2) of Rule 8D of the Rule. Accordingly, we restore the matter back to the file of Assessing Officer for the purpose of computing the amount of disallowance in the above mentioned manner. Nature of receipt - Taxability of the subsidy received by the respondent-assessee under the Package Scheme of Incentives, 2007 announced by the Government of Maharashtra - Revenue or capital receipt - HELD THAT:- As relying on case M/S. CHAPHALKAR BROTHERS PUNE [2017 (12) TMI 816 - SUPREME COURT] since the subsidy was granted actually as incentives for encouraging the dispersal of industries to the less developed areas of the State of Maharashtra, the subsidy cannot be treated as revenue receipt. As regards to the applicability of provisions of section 28(iv) of the Act, this envisages the value of entire benefit, whether convertible to money or not, which means the benefits have to be in the kind, the monetary benefits are not covered by the said provisions of the Act - Decided against revenue.
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