TMI Blog2016 (7) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for deduction under section 80IB in respect of interest income has been allowed. CIT(Appeals) al lowing the claim of the assessee for deduction u/s 80IB in respect of interest income. Ground No. 1 is accordingly dismissed. Disallowance u/s 14A - HELD THAT:- It is observed that the disallowance made by the Assessing Officer under section 14A on account of expenditure incurred by the assessee in relation to the earning of exempt income is sustained by the CIT(Appeals) to the extent of ₹ 24,996/- being 1% of the exempt dividend income. The disallowance under section 14A prior to the introduction of Rule 8D w.e.f. 2008-09 has to be done on some reasonable basis and as agreed by the ld. representatives of both the sides, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 66.76 lacs, a portion of which is attributable to total investments made for which exempt income have been earned. 2. We have heard the arguments of both the sides and also perused the relevant material available on record. As regards Ground No.1, the ld. representatives of both the sides have agreed that the issue involved therein relating to the assessee s claim for deduction under section 80IB in respect of interest earned from Fixed Deposits kept with Bank as margin money is squarely covered in favour of the assessee by the decision of the Hon ble Calcutta High Court in assessee s own case for A.Y. 2003-04 rendered vide its order dated 21.07.2014 in ITA No. 99 of 2007, wherein a similar claim of the assessee for dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deposits made for the purpose of providing margin money to the lending bank also has a direct nexus because the finding of the CIT (A) is , which is not disputed before us, that for the purpose of making such deposit the assessee had also borrowed money from the bank. The resultant effect is that if a deposit of ₹ 10/- is to be made by way of margin money for borrowing ₹ 100/- , the assessee has to borrow ₹ 110/- out of which ₹ 100/- can be used for his business and Rs .10/- can be invested by way of margin money. When he is paying interest for ₹ 110/- and receiving interest on the amount of ₹ 10/-, it can only be said that he is really paying interest for Rs. I00/- which he originally needed for the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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