2012 (10) TMI 21

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....cision of the Hon'ble I.T.A.T. in the case of the same assessee for earlier years on following counts :- (a) The ld. CIT(A) deleted the addition made u/s 80I without appreciating the facts of the case and merely relying upon the decision of the Hon'ble, I.T.A.T. in earlier years. (b) The ld. CIT(A) ignored the fact that the income from DEPB is not income from industrial undertaking as held by the Hon'ble Supreme Court in the case of CIT vs. Sterling Foods (23 ITR 579) and Liberty India vs. CIT, (317 ITR 218). 2. Deleting the addition of Rs.16,26,640/- u/s 14A on the following counts :-   (a) The ld. CIT(A) erred by questioning the method prescribed in "Rule 8D for the computation for the disallowance u/s 14A. (b) The ld.....

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....he income of DEPB in view of the decision of Hon'ble Supreme Court in the case of Liberty India, 317 ITR 218, it was submitted by the ld. Authorized Representative that while computing eligible amount of deduction, the assessee itself has excluded DEPB receipts from eligible profit. In the interest of justice, we restore ground no.1(b) to the file of Assessing Officer with a direction to verify computation of assessee's total income and if he finds that income from DEPB has already been excluded from income of the industrial undertaking on which deduction is claimed u/s 80I, no further disallowance is warranted otherwise, Assessing Officer and to decide the same as per the verdict of Hon'ble Supreme Court in the case of Liberty India (supra....

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....s only the interest amounting Rs. 848/- only. The Rule 8D is nothing but a method to allocate the expenses by way of average proportion. It would not empower the Assessing Officer to disallow what was not even claimed by the assessee. In the set of the facts, the disallowance under Rule 8D should have been limited to Rs. 848/- only. But I find that even that was not warranted because the interest payment of Rs. 848/- was against the vehicle loans availed by the employee of the company. The balance sheet reflects loan at Nil. The investment in the shares were made out of reserve and surplus. Thus, no disallowance u/s 14A can be made in the case of assessee in the year under consideration." 8. We have considered the rival submissions and f....