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DCIT- 15 (2) (1) , Mumbai Versus M/s. Hercules Hoists Ltd. and Vica-Versa

2016 (9) TMI 547 - ITAT MUMBAI

Eligible for deduction under section 80IA - Held that:- We uphold the finding of the learned CIT(A) that the assessee is eligible for deduction under section 80IA of the Act and also the directions of the learned CIT(A) to the AO to verify as to whether the losses have already been set off against the income of non-eligible unit in the earlier years and in case the losses were already set off then the same cannot be notionally carried forward for setting off against for computing the deduction u .....

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by the authorities below on this account. - ITA No. 7312/Mum/2014, CO No. 82/Mum/2016 - Dated:- 3-8-2016 - Shri Joginder Singh, Judicial Member and Shri Jason P. Boaz, Accountant Member For The Appellant : Shri Satyanarayana Raju For The Respondent : Shri M.A. Gohel ORDER Per Jason P. Boaz, A.M. This appeal by the Revenue is directed against the order of the CIT(A)- 22, Mumbai dated 16.09.2014 for A.Y. 2010-11. The assessee has also preferred cross objections (CO) against the aforesaid order .....

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the assessee was determined at ₹ 22,30,84,630/- in view of the following additions/ disallowances: - (i) Disallowance under section 14A ₹ 2,39,342/- (ii) Addition on account of unaccounted interest income ₹ 13,631/- (iii) Income from House Property ₹ 13,00,681/- (iv) Disallowance of deduction under section 80IA ₹ 1,67,39,116/- 2.2 Aggrieved by the order of assessment for A.Y. 2010-11 dated 02.12.2012, the assessee preferred an appeal before the CIT(A)22, Mumbai who .....

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nces of the case and in law, the learned CIT(A) erred in interpreting the relevant provisions that un-absorbed depreciation of the eligible unit need not be necessarily set off from the profits of the same units, but could be set-off from other non-eligible unit as well. 3. The appellant craves leave to add, amend; vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal. 4. The appellant prays that the order of CIT(A) on the above gr .....

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ed order of the learned CIT(A) holding that the assessee is eligible for deduction under section 80IA of the Act was in order. It is submitted that in holding so, the learned CIT(A) followed the decision of the Coordinate Bench of this Tribunal in the assessee s own case for A.Y. 2009-10 in ITA No. 2342/Mum/2012 dated 13.09.2012. The learned A.R. for the assessee contends that since the issue is squarely covered in favour of the assessee by the aforesaid decision of the Coordinate Bench (supra), .....

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09.2012 wherein at para 2.4 thereof it has been held as under: - 2.4 Having heard both the sides and perused the material on record, it is observed that the ITAT in ITA Nos. 7944, 7946, 2255 & 7943/Mum/2011 for the AYs. 2005-06 to 2008-09 in the assessee s own case while deciding an issue, i.e., section 80-IA (5) being applicable for the current year, whether the assessee s claim for set off of loss/allowance u/s 32(2) 70 and 71 is against other income, admittedly from a not eligible busines .....

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as decided as follows: We have carefully considered the submissions of the Ld. Representative of the parties and also perused the orders of the authorities below. We have also gone through the earlier orders of the Tribunal dated 6.2.2013, copy of which are placed at pages 28 to 31 of the paper book and the order dated 8.2.2013, copy of which is placed at pages 32 to 44 paper book (supra). We observe that the Tribunal has stated that the above issue is squarely covered in favour of the assessee .....

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units of the assessee in earlier years and directed the Ld.CIT(A) for adjudicating the issue afresh accordingly. Respectfully following the earlier orders of the Tribunal in assessee s own case (supra), we set aside the impugned order of the Ld.CIT(A) and restore the issue to the Ld.CIT(A) to adjudicate the same by following the earlier orders of the Tribunal after giving due opportunity of hearing to the parties. Hence Grounds of appeal taken by the assessee are allowed for statistical purpose .....

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direct accordingly. 3.4.2 Following the above cited decision of the Coordinate Bench of this Tribunal in the assessee s own case for A.Y. 2009-10 (supra), we uphold the finding of the learned CIT(A) that the assessee is eligible for deduction under section 80IA of the Act and also the directions of the learned CIT(A) to the AO to verify as to whether the losses have already been set off against the income of non-eligible unit in the earlier years and in case the losses were already set off then .....

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and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) [CIT(A)] in confirming the disallowance under Section 14A of the Act read with Rule 8D of the Income-tax Rules, 1962 at ₹ 2,39,342/-. It is submitted that the disallowance under Section 14A of the Act computed by the learned Assessing Officer and confirmed by the CIT(A) is excessive, unreasonable and unwarranted. The appellant prays that the disallowance made on assessment may kindly he delet .....

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ence bad in law. The appellant prays that the addition made by the learned Assessing Officer may be deleted or alternatively be restricted to the municipal ratable value thereof. 6. Objection No. 1(1.1)- Disallowance under section 14A: Rs. 2,39,342/- 6.1 In the course of assessment proceedings the AO noticed that the assessee had earned dividend income of ₹ 34,18,289/- which was claimed as exempt. The assessee made a suo moto disallowance of ₹ 3,31,749/- as expenditure incurred for e .....

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f the ITAT, Mumbai in the case of Daga Capital Management (P) Ltd. (2009) 117 Income Tax Officer 169 (Mum) (SB) worked out the disallowance under section 14A r.w. Rule 8D at ₹ 5,71,091/- and proceeded to disallow an amount of ₹ 2,39,342/- (i.e. ₹ 5,71,091/- less ₹ 3,31,749/- disallowed by the assessee suo moto). 6.2 On appeal, the learned CIT(A) was of the view that the assessee has neither proved that borrowed funds were not utilized for the purchase of shares of Bajaj A .....

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for purchase of Windmills. 6.4 Per contra, the learned D.R. for Revenue supported the orders of the authorities below. 6.5.1 We have heard the rival contentions and perused and carefully considered the material on record. It is the submission of the assessee before the learned CIT(A) that interest expenditure incurred during the year to the extent of ₹ 39,20,797/-, and in respect of which the disallowance under section 14A r.w. Rule 8D of ₹ 2,39,342/- is made by the AO, pertains to .....

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ividend income but pertain to business income which is taxable. We find that these factual submissions by the assessee though made before the learned CIT(A), as reflected at para 3.2 of his order, have not been examined or addressed by him in the impugned order. 6.5.2 In the above factual matrix placed before us we are of the view that the facts on record reveal that the interest expenditure of ₹ 39,20,797/- incurred towards term loans taken for purchase of Windmills by the assessee in the .....

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