TaxTMI 
TaxTMI 
2018 (4) TMI 1511
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Income Tax Act, 1961 (in short "the Act") dated 27.12.2011 for the Assessment Year 2009-10. 2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in partially confirming the disallowance u/s 14A of the Act read with Rule 8D of the Rules. 3. The brief facts of this issue is that the assessee has derived dividend income and had claimed the same as exempt income in the return of income and disallowed the sum of Rs. 30,57,783/- under Rule 8D(2)(iii) being 0.5% of average value of investment and also considering certain direct expenses incurred for the purpose of earning exempt income. The ld. AO recomputed the disallowance under Rule 8D and arrived at the figure as below under Rule 8D(2)(ii) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....counts and had to record satisfaction as to why the calculation made by the assessee is incorrect and as to why he is ignoring the same and proceeding to invoke the computation mechanism provided in Rule 8D(2) of the Rules. This has to be done with cogent reasons by the ld AO. This is the requirement of Hon'ble Jurisdictional High Court in the case of CIT vs Ashish Jhunjhunwala ...................... (mention the citation here which I gave you in IMC Ltd case) . Hence, we hold that no disallowance is to be made u/s 14A of the Act over and above Rs. 30,57,783/- which has already been disallowed by the assessee. Accordingly ground no. 1 raised by the assessee is allowed. 4. The next issue to be decided in this appeal is as to whether the L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch substantial expansion were undertaken. In other words, in the opinion of Ld. CIT(A), the substantial expansion once undertaken should be completed within the same financial year in order to claim deduction u/s 80IE of the Act. The Ld. CIT(A) also made a passing reference that the additions to plant and machineries were made in 2 to 3 years time by the assessee in the normal way which are on account of replacement of old machineries. The Ld. CIT(A) did not agree to the contention of the assessee that there is no time limit prescribed in Section 80IE of the Act to complete the substantial expansion within the year in which it was undertaken.. Based on this observation, the Ld. CIT(A) upheld the action of the ld. AO in denying deduction u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m such business as deduction for 10 assessment years commencing with the Initial Assessment Year. The expression 'Initial Assessment year' is defined in section 80IE(7) as under: (7) For the purposes of this section,- (i ) "initial assessment year" means the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, or completes substantial expansion; [Underlining provided by us] From the aforesaid definition of 'initial assessment year', it could be inferred that the initial assessment year shall be the year in which the substantial expansion is completed by the assessee which would enable it to generate revenues and claim deduction thereon u/s 8....