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Hydroair Tectonics (PCD) Ltd. Versus ACIT-Range10 (3) Mumbai.

2016 (4) TMI 849 - ITAT MUMBAI

Disallowance u/s 14A - Held that:- earlier noticed that the dividend received/receivable from PCIL and VBL alone are exempt. These investments have been made in the earlier years and further the investment made in PCIL was a strategic investment. The assessee has received dividend income of ₹ 2,000/- only during the year under consideration and the said dividend income has also been directly credited to the bank account of the assessee. Considering the smallness of the dividend income and .....

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ar under consideration. Accordingly, we set aside the order of the CIT(A) on this issue and direct the Assessing Officer to delete the disallowance made u/s. 14A - Decided in favour of assessee

Rejection of deduction claimed u/s. 80IA - Held that:- We have earlier noticed that both the AO as well as the Ld CIT(A) has made some more observations to support the rejection of the claim for deduction u/s 80IA of the Act. The Ld A.R submitted that the assessee shall be in a position to sati .....

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this appeal challenging the order dated 16.01.2013 passed by the ld. CIT(A)-37, Mumbai for the AY 2008-09. 2. At the time of hearing ld. Counsel appearing for the assessee did not press Ground Nos. 3 and 4. Accordingly, those grounds are dismissed as not pressed. The remaining grounds relate to the following two issues:- a) Disallowance made u/s. 14A of the Act and b) Rejection of deduction claimed u/s. 80IA of the Act. 3. We have heard the parties and perused the record. The assessee company i .....

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orked out the disallowance as per Rule 8D of the IT Rules and accordingly disallowed a sum of ₹ 19,20,787/-, which was also confirmed by CIT(A). 3.2 The Ld. Counsel invited our attention to the schedule of investment given in the Annual Report and submitted that the assessee has made investment in the following companies:- i) Jankalyan Sahakari Bank, ii) PRIA CETP (India) Ltd. And iii) Vijaya Bank Ltd. 3.3 The ld. Counsel submitted that the dividend received from Jankalyan Sahakari Bank(JS .....

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that the dividend income of ₹ 2,000/- has been directly credited to the bank account of the assessee. Accordingly, he contended that the provisions of section 14A shall not be applicable to the facts prevailing in the instant year. He further submitted, that the Assessing Officer, did not comply with the mandatory condition prescribed u/s. 14A of the Act before applying the provisions of Rule 8D, i.e., he did not record his dis-satisfaction with the claim made by the assessee by having re .....

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se investments have been made in the earlier years and further the investment made in PCIL was a strategic investment. The assessee has received dividend income of ₹ 2,000/- only during the year under consideration and the said dividend income has also been directly credited to the bank account of the assessee. Considering the smallness of the dividend income and also considering the fact, that the investment in shares have been made in the earlier years, we are of the view that there is m .....

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te the disallowance made u/s. 14A of the Act. 4. The next issue relates to rejection of deduction claimed u/s. 80IA of the Act. 4.1 During the year under consideration, the assessee had undertaken a project to develop, operate and maintain an infrastructure facility for its MSW/CETP projects on BOOT basis. The assessee claimed deduction u/s. 80IA of the Act in respect of two units, viz., ₹ 6.22 crores in respect of Roha unit and ₹ 2.49 crores in respect of Ichalkaranji Unit. The Asse .....

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ty or a board or a corporation or any other body established or constituted under any Central or State Act) ; (b) it has entered into an agreement with the Central Govern ment or a State Government or a local authority or any other statutory body for (i) developing, or (ii) operating and maintaining, or (iii) developing, operating and maintaining a new infrastructure facility ; (c) it has started or starts operating and maintaining the infra structure facility on or after the 1st April, 1995: Th .....

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o have claimed that it along with RIA CETP Co-op Society Ltd has entered into a MOU with Maharashtra Industrial Development Corporation (MIDC) and further it was claimed that the MOU should be treated as an agreement specified in sec. 80IA(4)(i)(b). However, the AO reported in the MOU that MIDC was acting only as facilitator and accordingly stood by his order. The Ld CIT(A) was convinced with the remand report and he further observed that:- (a) the assessee has not brought any material on record .....

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d the parties on this issue and perused the record. We notice that the issue under dispute is about the nature of MOU entered between the assessee along with M/s R.I.A CETP Co-op Society Ltd and M/s MIDC. According to the assessee the MOU satisfies the characteristics of an agreement , whereas according to the AO, the same cannot be considered to be an agreement. Though MIDC is accepted as a Statutory body, the AO has observed that the MIDC only acts as a facilitator. Besides the above, the Ld C .....

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