TaxTMI 
TaxTMI 
2020 (3) TMI 1223
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....10 dated 23/3/2013 for A.Y.2004-05, ITA No.283/DC-11(3)/A-I/13-14 dated 30-4-2014 for A.Y.2005- 06, ITA No.191/DC-11(3)/A-I/12-13 dated 30-08-2013 for A.Y.2007-08, ITA No.284/DC-11(3)/A-I/13-14 dated 30-04- 2014 for A.Y.,2011-12 in the assessee's own case without appreciating that the relied upon orders have not been accepted and appeals us/.253 have been preferred and the assessee had not fulfilled the conditions for the approval granted by the Ministry of Commerce and Industry. 3. The CIT(A) erred in not appreciating that there were three tenants. in the industrial park as against the first condition that 4 units should be located in the industrial park and a super built up area of 1,38,000 sq. ft. was leased to M/s. I-Flex Solutions Ltd., which is more than 60% of the total allocable area. 4. The CIT(A) erred in not appreciating the fact that out of the three companies found to be available, M/s. Transworks Information Services Ltd. and M/s. Transworks IT services were actually one and the same company amalgamated by an order of Hon'ble High Court of Mumbai. 5. The CIT(A) erred in allowing relief without appreciating that in the relied upon ord....
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....usiness and held that the interest expenditure of Rs. 2,90,87,733 would be allowed as deduction from the said income and the remaining sum of Rs. 1,17,35,191 would be treated as taxable income from business. In this regard AO observed in his order at paragraph-6.2 that if the Assessee takes a view before the appellate authorities that alternatively it is eligible to claim deduction u/s.80IAB(4)(iii) of the Act, such deduction should not be allowed for the reasons which he had given in his order of Assessment for AY 2011-12. In the grounds of appeal before the CIT(A) in ground No.3 the Assessee has raised a ground challenging the action of the AO in denying deduction u/s.80IAB(4)(iii) of the Act but that ground of appeal mentions the sum of Rs. 3,29,18,939/- which sum is the sum claimed as deduction in AY 2011-12. It should be read as Rs. 1,17,35,191/- which was the sum treated by the AO as income from Millennium Project. 5. The CIT(A) in paragraph 4.3 of his order held that if the AO considers income from Millennium project as Business income then he should allow all the expenses claimed by the Assessee and therefore the income from Millennium project arrived at by the AO at ....
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....ndirect interest pertaining to tax exempt investments Rs. 14,79,79,010/- A.Y.2012-13 A.Y. 2011-10 Average C Average amount of tax exempt investments 144,28,34,179 118,32,63,765 131,30,48,968 D Average Amount of Total Assets 627,36,26,645 543,67,72,896 585,51,99,771 E Proportionate indirect interest to be disallowed B X C D 14,79,79,010 x 131,30,48,968 585,51,99,771 = 3,31,84,809 F 0.5% of average amount of tax exempt investment 65,65,245 G Total Disallowance attracted u/s. 14A read with Rule 8D 3,97,50,054 7.6. Accordingly an amount of Rs. 397,50,064/- is disallowed and added back to the total income u/s. 14A r.w. Rule 8D of the Income-tax Act." 7. On appeal by the Assessee, the CIT(A) reduced the disallowance made by the AO to Rs. 65,65,245 which is the disallowance under Rule 8D(2)(iii) of the Income Tax Rules, 1962 (Rules) which is other expenses other than direct expenses and interest expenses attributable to earning exempt income. As far as disallowance under rule 8D(2)(ii) of the Rules regarding interest expenses is co....
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.... evidence on record to show the nexus between the borrowals and tax-free investments. Further, even though the appellant has made tax free investments during the year under consideration, but it is also noted that the appellant having sufficient noninterest bearing fund during the year. 6.8 In view of the above decision, none of the interest payments claimed by the appellant can be taken for the purpose of Rule 8D(2)(ii) of I.T. Rules. Therefore, the disallowance of Rs. 3,31,84,809/- is hereby deleted." 8. Aggrieved by the order of the CIT(A), the revenue has raised Grds.No.7 & 8 before the Tribunal which reads as follows:- "7. The CIT(A) erred in deleting the disallowance of Rs. 3,31,84,809/- by holding that none of the interest payments can be taken for the purposes of Rule 8D(2)(ii) without appreciating the provisions of Section 14A read with Rule 8D in its true sense and right spirit and the fact that when the interest expense incurred cannot be directly attributed to any particular income or receipt, provisions of Rule 8D(2)(ii) are automatically applicable. 8. The CIT (A) erred in holding that the payments cannot be attributable to borrowings spe....