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2018 (4) TMI 1511 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - suo moto disallowance - Held that:- We find that the assessee itself has disallowed ₹ 30,57,783/- u/s 14A by duly considering the direct expenditure and also indirect expenditure in terms of Rule 8D(2)(iii) of the Rules. Against the disallowance deleted by the Ld. CIT(A) under Rule 8D(2)(ii), the revenue is not in appeal before us. AO had not looked into the workings given by the assessee having regard to the accounts and had to record satisfaction as to why the calculation made by the assessee is incorrect and as to why he is ignoring the same and proceeding to invoke the computation mechanism provided in Rule 8D(2) of the Rules. Thus we hold that no disallowance is to be made u/s 14A over and above ₹ 30,57,783/- which has already been disallowed by the assessee. - Decided in favour of assessee Denial of deduction u/s 80IE - assessee is engaged in the business of growing and manufacturing of tea, manufacturing chemical and fertilizers, trading of tea, warehousing and development of real estate - substantial expansion - Held that:- As find that the expression ‘substantial expansion’ is also defined in 80IE(7)(iii) wherein, it should result in increase in investment of plant and machinery by at least 25% of the book value of plant and machinery. This factual aspect as to whether the assessee had indeed invested in plant and machinery more than 25% of the book value of plant and machinery (before depreciation in any year); as on the first day of the previous year in which substantial expansion is undertaken, was not verified by the authorities below. Thus remand this issue to the file of the AO, for this limited purpose of verification of quantum of investment in plant and machinery so as to satisfy the definition of substantial expansion within the meaning of 80IE(7)(iii) of the Act. - Decided in favour of assessee for statistical purposes.
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