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TMI Blog2015 (5) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... s 14A while computing the book profit u/s 115JA. 3. The assessee's company is engaged in the business of infrastructure, including setting up of infrastructure project, leasing and financial services. The facts regarding disallowance u/s 35D are that assessee had claimed deduction u/s 35D, which has been disallowed by the AO on the ground that, similar issue had come up for consideration in the A.Y. 1997-98, wherein it was held that assessee is not an industrial undertaking as it is dealing in the business of finance and leasing. The Ld. CIT(A) too has confirmed the said disallowance relying upon the earlier order of the Ld. CIT(A) for the A.Y. 1997-98. 4. Before us, learned counsel submitted that right from the A.Y. 1991-1992 to A.Y. 1997-98 and also in the subsequent years for the A.Ys. 1999-2000 to A.Y. 2001-02, this matter has been set aside to the file of the AO. This issue has been mainly discussed in the order of the Tribunal for the A.Y. 1990-91 in ITA No. 127/Bom/1995. The Ld. DR also admitted that this issue is covered by order of the Tribunal and therefore, this matter should be restored back to the file of the AO. 5. After considering the relevant material placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - and further reducing the deduction u/s 10(33) at Rs. 89,83,946/- as against claim of the assessee at Rs. 1,54,81,590/-. The assessee has claimed deduction u/s 10(23)G on gross basis, whereas the Assessing Officer held that in view of insertion of section 14A w.r.e.f. 01.04.1962 only the net income has to be included for the purpose of deduction against the gross interest and is to be reduced from the total income, hence deduction u/s 10(23)(a) was computed by him at Rs. 85,66,404/- as against the claim of the assessee of Rs. 2,88,26,805/-. Similarly the AO noted that assessee has claimed deduction u/s 10(33) on account of dividend income of Rs. 1,54,81,589/- without deducting the interest. He required the assessee to submit the working of the expenses allocated for earning of the dividend income which was worked out by the assessee and net dividend income of Rs. 89,83,946/- was arrived at and only this amount was allowed as deduction by the AO. 8. The Ld. CIT(A) has confirmed the said disallowance on the ground that the similar issue had arisen in the earlier years, wherein the Ld. CIT(A) has decided this issue against the assessee. 9. Before us, learned counsel submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 5 are treated as allowed for statistical purposes. 12. In ground no. 6 to 8, the disallowance u/s 14A has been challenged, while computing the book profit u/s 115JA. This issue had also come up for consideration before the Tribunal in assessee's own case. The Tribunal after taking note of the decision of Hon'ble Delhi High Court in the case of CIT Vs. GOETZ India Ltd. [(2014) 361 ITR 505], wherein it has been held that the amount disallowance u/s 14A under the normal provisions of the act is required to be added while computing the book profit u/s 115JA, has restored the matter to the file of the AO. Accordingly, we also restore this matter to the file of the AO, as the issue of disallowance u/s 14A has already been set aside to the AO. Accordingly, the AO will decide the issue in light of the decision taken by him while deciding the issue of disallowance u/s 14A, under the normal provisions of the Act. In the result, the appeal of the assessee is allowed for statistical purpose. 13. Now we will take up revenue's appeal being, ITA No. 4783/Mum/2001, wherein various ground have been raised which are being discussed hereunder, in brief. 14. In ground no. 1 the revenue has chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) holding that the capital was borrowed for the expansion of similar line of business and therefore, such interest has to be allowed as business expenditure. The Tribunal in the A.Ys. 1993- 94 and 1994-95 has considered this issue in detail and has upheld the order of the Ld. CIT(A) after referring to catena of decisions. The same view has been reiterated by the Tribunal in the appeal for the A.Y. 1999- 2000 to 2001-02, wherein the Tribunal observed and held as under:- "The next issue relates to the disallowance of interest claimed u/s 36(1)(iii) of the Act on the reasoning that part of interest has to be capitalized. The AO disallowed part of interest claim by holding that they relate to the amounts borrowed for acquisition of Capital assets. However, this issue has been decided in favour of the assessee by the Tribunal in the assessee's own case in earlier years viz., ITA No.2773/Mum/98 and 2283/Mum/98 relating to AY 1994-95 and 1993-94. We also notice that the following proviso was inserted in sec.36(1)(iii) only with effect from 1.4.2004 by Finance Act 2003:- "provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset-tor- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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