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2018 (12) TMI 58 - ITAT VISAKHAPATNAMDeduction claimed by the assessee u/s 10AA - additional income offered on account of suomoto adjustment and transfer pricing provisions - Held that:- In instant case, the claim made by the assessee is not a fresh claim, it is only an alternate claim and the same is correct claim made by the assessee. The fact that the assessee has carried on the business from the SEZ unit was not disputed by the AO. AO also did not dispute the fact that the profit was related to the new unit established in the VSEZ. The assessee has filed audit report which is placed according to which the entire profit and the turnover was related to the unit located in VSEZ, Rushikonda. Hence, we are of the considered view that merely because of the technical reasons the justice should not suffer. In the subsequent assessment years, on the same facts, the AO has allowed the deduction u/s 10A of the Act. CIT(A) also confirmed the addition misdirecting himself that the assessee has made the opposite claim. In fact, there was no opposite claim made by the assessee and it was only an alternate claim. Similar issue of alternate claim u/s 10A has come up before the Coordinate Bench of ITAT Pune in the case of Approva Systems (P) Ltd., (2018 (3) TMI 1031 - ITAT PUNE) and the coordinate bench held that the assessee is entitled to claim deduction u/s 10A on additional income offered on account of suomoto adjustment and transfer pricing provisions. Disallowance of expenditure u/s 14A - Held that:- There is no case for disallowance under Rule 8D of IT Rules. The fact that there was no dividend income earned by the assessee is not in dispute. No disallowance is called for in the absence of exempt income. We hold that in the absence of the exempt income, there is no case for making the disallowance u/s 14A of the Act. Accordingly, we set aside the order of the Ld.CIT(A) and allow the appeal of the assessee.
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