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2023 (3) TMI 348 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - computation of amount of disallowance under Rule 8D(2)(iii) - HELD THAT:- We find merit in the contention the appellant that for the purpose of computation of amount of disallowance under Rule 8D(2)(iii), the value of such investments which yielded exempt income alone has to be considered in the light of the decision of Joint Investments Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT], the decisions of ACB India Ltd. [2015 (4) TMI 224 - DELHI HIGH COURT], Marg Ltd. Vs. CIT [2020 (10) TMI 102 - MADRAS HIGH COURT] and CIT Vs. Shriram Ownership Trust 318 CTR (Mad.) 233 and also by the Hon’ble Karnataka High Court in the case of Pragathi Krishna Gramin Bank [2020 (12) TMI 736 - MADRAS HIGH COURT]. Therefore, we remand the issue of computation of disallowance under Rule 8D(2)(iii) to the file of the Assessing Officer with the direction to compute the value of those investments which yielded the exempt income alone for the purpose of computing the average value of investments. Thus, this ground of appeal no.2 raised by the assessee stands partly allowed for statistical purposes. Allowance of balance of additional depreciation - asset was not put to use for less than 180 days - HELD THAT:- This issue is no longer res integra as it was decided by the Hon’ble Jurisdictional High Court in the case of PCIT vs. M/s. Godrej Industries Ltd. [2018 (12) TMI 64 - BOMBAY HIGH COURT] following the decision CIT vs. Rittal India Pvt. Ltd. [2016 (1) TMI 81 - KARNATAKA HIGH COURT] and case of CIT vs. Shri T. P. Textiles Pvt. Ltd. [2017 (3) TMI 739 - MADRAS HIGH COURT] and also the legislative amendment has been brought by inserting third proviso to clause (ii) of sub-section (1) of section 32 of the Act allowing the benefit of balance of 50% of depreciation in the subsequent year in such situation. Respectfully, following the above legal positions, this ground of appeal no.3 stands allowed in favour of the assessee company. Subsidy received from Government of Maharashtra under Package Scheme of Incentive, 2007 to be reduced from the actual cost of asset in terms of Explanation 10 to section 43(1) - HELD THAT:- This issue stands covered in favour of the assessee company by the decision of the Co-ordinate Bench of this Tribunal in the case of ITO vs. Shriniwas Engineering Auto Components Pvt. Ltd. [2022 (4) TMI 1486 - ITAT PUNE] as held now subsidy given by the Central Government or a State Government or any authority etc. for any purpose, except where it is taken into account for determination of the actual cost of the asset under Explanation 10 section 43(1), has become chargeable to tax. Even if a subsidy is given to attract industrial investment or expansion, which is a otherwise a capital receipt under the pre-amendment era, shall be treated as income chargeable to tax, except where it has been taken into account for determining the actual cost of assets in terms of Explanation 10 to section 43(1). This amendment is patently prospective. As the assessment year under consideration is 2011-12 and the amendment is effective from assessment year 2016-17, new hold that section 2(24) (xviii) will have no application - Decided in favour of assessee. Nature of expenses - Disallowance towards amortization of leasehold premium paid in respect of land acquired from Gujarat Power Corporation Limited, Gujarat for Solar Project on leasehold basis - HELD THAT:- This issue is no longer res integra as it is settled by the decision of the Hon’ble Supreme court in the case of Aditya Minerals Pvt. Ltd. [1998 (2) TMI 8 - SUPREME COURT] wherein, the Hon’ble Apex Court held that lease rent paid for acquiring mining rights is capital in nature and cannot be allowed as a deduction. Thus the impugned amortization of lease premium cannot be allowed as “revenue expenditure”. Thus, the ground of appeal filed by the assessee stands dismissed.
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