TaxTMI 
TaxTMI 
2011 (1) TMI 39
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....aw, the Ld.CIT(A) has erred in directing the AO to include sums of Rs. 1,67,967 pertaining to Dadra Unit and Rs. 9,90,873 pertaining to Samba Jammu Unit received as insurance for calculating the deduction u/s 80IB of the I.T. Act. 2.1 The Ld.CIT(A) ignored the fact that insurance receipt is not business receipt and does not qualify for deduction u/s 80IB of the I.T. Act. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 30,45,437 made by the AO u/s 14A of the I.T. Act. 3.1 The Ld.CIT(A) ignored the fact that the disallowance has been correctly made by the AO u/s 14A of the I.T. Act as per the provisions of the Rule 8D of the I.T. Rules." 2. Ground no.1 is gen....
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....nd were not made to earn interest income; that the deposits would not have been made, if there had been no compulsion to issue bank guarantee, margin money, etc. for the purpose of import material; that the import material was directly related to the business of manufacture, carried on by the eligible undertaking; that as such, the interest earned was eligible for deduction u/s 80IB of the Act; that the claims had been received from insurance company on account of loss of goods in transit; that the claims were directly related to the business of the eligible undertaking, as they have been received against goods manufactured by the eligible undertaking; that the claims received were receipts related to the business of eligible undertaking, e....
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.... Rs. 990873, received by the assessee as insurance claims, in its Dadra & Samba units respectively, for calculating the deduction u/s 80IB of the I.T. Act. The CIT(A), in this regard, placed reliance on "CIT vs. Spot King India Ltd.", 324 ITR 283 (Del.). 9. The Ld.DR in this regard has contended that the CIT(A) has ignored the fact that the insurance receipt is not a business receipt and does not qualify for deduction u/s 80IB of the Act. 10. Ld.Counsel for the assessee, on the other hand, has placed strong reliance on the impugned order. 11. We find that reliance placed by the CIT(A) on "Spot King India Ltd." (supra) is proper. In that case, the plea of the assessee regarding claim of deduction u/s 80IB in respect of insurance cla....
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....hat the CIT(A) has erred in deleting the addition of Rs. 3045437, ignoring the fact that the disallowance had been correctly made by the AO u/s 14A of the Act as per the provisions of Rule 8D of the I.T. Rules. 16. The Ld.Counsel for the assessee, on the other hand, has strongly supported the impugned order. It has been contended that the assessee had itself made a disallowance of Rs. 173038 relating to expenses incurred at its head office Division; that this disallowance has rightly been maintained by the CIT(A), giving a relief of Rs. 3045437 to the assessee; that there was no satisfaction recorded by the AO that the method followed by the assessee was not proper; that the provisions of section 14A(2) were not followed by the AO and wr....
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....the assessee keeping in consideration, the provisions of section 14A of the Act. 18. Now, as per section 14A(2) of the Act, if the AO, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of expenditure incurred in relation to income which does not form part of the assessee's total income under the Act, the AO shall determine the amount incurred in relation to such income, in accordance with such method as may be prescribed, i.e., under Rule 8D of the I.T. Rules. However, in the present case, the assessment order does not evince any such satisfaction of the AO regarding the correctness of the claim of the assessee. As such, Rule 8D of the Rules was not appropriat....