Tribunal Partially Accepts Appeals on Disallowance & Remands Section 80IE Deduction Issue

The tribunal partly accepted the appeals for the former two assessment years regarding disallowance under section 14A r.w.r. 8D, while accepting the appeal for the last assessment year for statistical purposes. The issue of denial of section 80IE deduction for the unit/garden in the north-east was remanded to the Assessing Officer for verification of investment in plant and machinery in all three assessment years.

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Issues:
1. Disallowance under section 14A r.w.r. 8D in relation to exempt income.
2. Denial of section 80IE deduction for unit/garden in north-east.

Analysis:
1. The appellant filed appeals for A.Y. 2010-11, 2011-12 & 2013-14 against CIT(A)'s orders under section 143(3) of the Income Tax Act, 1961. The issue of disallowance under section 14A r.w.r. 8D was raised. The CIT(A) had already granted relief to the appellant in the former two assessment years by deleting interest expenditure disallowance under Rule 8D(2)(ii). The appellant had not challenged the disallowances during the lower appellate proceedings. The tribunal rejected the substantive ground in the former two assessment years as the appellant's grievance was deemed not maintainable.

2. The appellant challenged the denial of section 80IE deduction for its unit/garden in the north-east. The CIT(A) upheld the disallowance based on the completion of substantial expansion within the same financial year. The tribunal referred to a previous order in the appellant's case and noted that there is no time limit prescribed in Section 80IE for completing substantial expansion. The tribunal found that the authorities had not verified the investment in plant and machinery as required by the definition of substantial expansion. Therefore, the issue was remanded to the Assessing Officer for verification. The tribunal accepted the appellant's grievance for statistical purposes in all three assessment years, ordering a remand for verification of investment in plant and machinery.

In conclusion, the tribunal partly accepted the appeals for former two assessment years and accepted the appeal for the last assessment year for statistical purposes, remanding the issues back to the Assessing Officer for verification.

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