AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 182
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....nditions regarding substantial expansion made by the assessee in the Parwanoo unit? 2. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) has erred in allowing the deduction u s 80IC of the Act of Rs. 10.46,93,829/- by merely following the decision of the then Id. ClT(A) for A.Y 2006-07 in the case of the assessee and ignoring the fact that the assessee has not fulfilled the conditions prescribed u/s 80IC (2)(b) read with section 80IC(7)(ix) of the Act and the fact that the matter is sub-judice with the jurisdictional ITAT for AY. 2006-07? 3. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) has erred in allowing the deduction u/s 80IC of the Act of Rs. 10,46,93,829/- by ignoring the observation of the AO in the assessment order that the substantial expansion was not effected by the assessee company within the prescribed limit given in the Act and that the assessee was not engaged in the manufacturing activity for the purpose of which deduction u/s 80IC in allowable? 4. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 5. That the grounds of appeal are without ....
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....7,05,02,160/- after making various disallowances/additions. Aggrieved, the assessee filed appeal before the learned CIT-(A), who partly allowed the appeal of the assessee. Aggrieved, both the Revenue and the assessee are in appeal raising the respective grounds, as reproduced above. ITA No. 6500/Del/2014 5. First, we take up the appeal of the Revenue in ITA No. 6500/Del/2014. The grounds No. 4 to 6 of the appeal are general in nature, therefore, we are not required to adjudicate upon those grounds and same are dismissed as infructuous. 3. The ground No. 1 to 3 of the appeal are in relation to deletion of disallowance of deduction amounting to Rs. 10,46,93,829/- under section 80IC the Act. The Ld. CIT-(A) has deleted the disallowance following the decision of his predecessor in assessment year 2006-07. In the grounds, the Revenue has raised the issue that substantial expansion of the unit was not effected within the prescribed limit given in the Act and the assessee was not engaged in the manufacturing activity for the purpose of deduction under section 80IC of the Act. 4. At the outset, the Ld. counsel of the assessee brought to our attention that the issues in dispute ....
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.... that the appellant was not eligible for deduction u/s 80IC. The appellant, however, has brought on record various appellate orders of the Ld. CIT (A) Hon'ble ITAT, Hon'ble Jurisdictional High Court as well as the Hon'ble Apex Court in the appellant's own case in which this issue has been decided in favour of the appellant with reference to its claim of deduction u/s 80IB for the A.Ys 2001-02 to 2005-06. As seen from the copies of the relevant orders filed by the appellant in the paper book, further appeal filed by the Revenue against the aforesaid decision of Tribunal was also dismissed by the Hon'ble Jurisdictional High Court in ITA No. 486/2009 and the Special Leave Petition filed by the Department before the Hon'ble Supreme Court was also dismissed, vide order dated 13.05.2010 (SLP No. 764 of 2010). It is also pertinent to note that the Hon'ble Tribunal had based its decision on the judgment of the Hon'ble Delhi High Court in the case of CIT v. Oracle Software India Ltd. 293 ITR 353, which has been subsequently affirmed by the Hon'ble Supreme Court in Civil Appeal No. 235 of 2010 reported at 228 CTR 433. In view of the above position, this issue is decided in favour of....
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....year and the assessee is not engaged in the manufacturing activity and with this conclusion, deduction us/ 801 of the Act was disallowed by the AO. 8. During the first appellate proceedings, the CIT(A) considered the explanation and submission of the assessee and held that even if various amounts of internet brandwith testing charges totalling to Rs. 97,445 are considered to be revenue expenses and are not considered part of plant and machinery for the purpose of substantial expansion and another amount of Rs. 16,020 spent for site survey and commissioning of internet Bandwidth renaming to earlier year cannot be treated as part of substantial expansion raring the relevant previous year even after disallowing other capitalized charges, the assessee has been able to justify the increase of plant and machinery to the tune of Rs. 18,35,423 (Rs.19,48,888 - Rs. 1,13,465) at Parwanoo unit. We are also in agreement with the conclusion of the CIT(A) that this amount of increase of plant and machinery during the year under consideration viz. Rs. 18,35,423 is more than 50% of the opening value of the plant and machinery for Parwanoo i.e. Rs. 34,63,220 (as on 1.4.2005) then the claim ....
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.... under sec. 80IC of the Act is also allowable to an undertaking engaged in manufacturing or producing any article or things not included in the negative list, of the 13th Schedule, the assessee was not eligible for deduction under sec. 80IC of the Act. The Learned CIT(Appeals) following several decisions, cited before it, had allowed the claimed deduction which has been now upheld by the Hon'ble Supreme Court this thing finding that the assessee is eligible to claim deduction under sec. 80IB for the assessment years 2001-02 to 2005- 06. Since the issue is covered by the decision of Hon'ble Supreme Court in the case of assessee itself under similar set of facts followed by the Learned CIT(Appeals), we do not find reason to interfere with the First Appellate Order in this regard. The same is upheld. The grounds involving the issue are accordingly rejected." 9. As regard contention of the learned CIT(DR) that the assessee has already been allowed deduction under section 80IB of the Act for five years and therefore, it should not be allowed deduction under section 80IC of the Act, we may like to mention the subsection 6 of section 80IC which restricts deduction under section....
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....no portion of the interest expenditure was incurred or considered for disallowance. According to the Assessing Officer, the investment in shares/mutual fund requires use of official machinery and help of its management and employees. The Assessing Officer was not satisfied with the correctness of the working of the assessee, thus invoking Rule 8D of Income Tax Rules, 1962, he computed disallowance of Rs. 17,63,153/- under Rule 8D(2)(iii) as 0.5% of average assets of Rs. 35.26 crores and added the same to the income assessed under normal provisions of the Act. The learned CIT-(A) concurred with the finding of the Assessing Officer, however, he allowed benefit of the disallowance already made by the assessee and sustained the balance addition of Rs. 14,97,616/-. 14. Before us, the Ld. counsel of the assessee submitted that the Assessing Officer has not complied with the prerequisite of dissatisfaction with the claim of the assessee of disallowance under section 14A of the Act. The learned counsel also submitted that assessee has already made disallowance of Rs. 2,65,537/- exceeding the exempted dividend income of Rs. 2,36,385/- and, therefore, no disallowance is required to be mad....