TaxTMI 
TaxTMI 
2022 (9) TMI 1040
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....w in allowing the benefit under Section 80IC of the Income Tax Act by not appreciating the facts and evidences on record that the assessee has not undertaken substantial expansion of business as is required under Section 80IC(2)(b)(iii) of the Act for claiming the benefit of exemption under Section 80IC of the Income Tax Act ?" 3. There are two other substantial questions of law on which ITA/159/2018 and ITA/65/2021 were admitted which are as follows which we will deal in the later portion of this judgment. "(i) Whether on the facts and in the circumstances of the case, the learned Tribunal failed to consider that in cases where no direct nexus between borrowings and investments could be established especially when investments and regular business are run out of distinctly separate bank accounts, rule 8(iii) of the Income Tax Rules, 1962 cannot be invoked ? (ii) Whether on the facts and circumstances of the case, the learned Tribunal erred in law in deleting an amount of Rs.1,17,99,000/- /Rs.1,03,70,000/- added by the Assessing Officer under Section 14A of the Act read with Rule 80D(ii) of the Rules?" 4. The decision rendered by the learned Tribunal for the ....
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.... Sikkim, Uttaranchal and North-Eastern States with a view to give boost to the economy in those States. By insertion of Section 80IC of the Act with effect from 1st April, 2004 deduction was allowed for ten years from the profits of new undertakings or enterprises or existing undertakings or enterprises on their substantial expansion in those States during the period beginning 24th December, 1997 and ending before 1st April, 2007 in any of the North-Eastern States. 8. The CIT(A) has pointed out that deduction has been allowed to the assessee under Section 80IB of the Act for the assessment years 2002-03 and 2003-04 and after Section 80IC was inserted deduction was allowed for the assessment years 2004-05 and 2005-06 with effect from 1st April, 2005. The other company got amalgamated with the assessee and the assessee was granted the benefit of deduction under Section 80IC of the Act for the assessment years 2006-07, 2007-08 and 2009-10. For the subject assessment years 2008-09, 2010-11 and 2011-12 which are the subject-matter in these three appeals the deduction was disallowed. The reasoning of the assessing officer in all these three years is that the assessee has not undertake....
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....in special category States. Sub-Section (1) of Section 80IC states where the gross total income of an assessee includes in profit and gains derived by an undertaking or an enterprise from any business referred to in sub-Section (2), there shall, in accordance with and subject to the provisions of Section 80IC, be allowed in computing the total income of the assessee, a deduction from such profits and gains as specified in sub-Section (3) of Section 80IC. Sub-Section (2) of Section 80IC deals with the undertakings and enterprises to which Section 80IC would apply. Clause (b) of sub-Section (2) of Section 80IC would be relevant to the cases on hand. The said clause (b) of Section 80IC(2) applies to any undertaking or enterprise which has begun or begins to manufacture or produce any article or thing specified in the Fourteenth Schedule or commences any operation specified in that Schedule. The second category of undertakings are those which manufactures or produces any article or thing in the Fourth Schedule; and the third category being undertakings or enterprises which commenced operations specified in the Fourteenth Schedule and undertakes substantial expansion during the relevant....
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....o how the power under section 14A(2) read with rule 8D of the Rules could be invoked it was pointed out that the Assessing Officer needs to record satisfaction that having regard to the kind of the assessee suo motu disallowance under section 14A was not correct and it will be in those cases where the assessee in his return has himself apportioned but the Assessing Officer was not accepting the said apportionment. In any event, the Assessing Officer will have to record its satisfaction to the said effect. . . . . . . . . . We also take note of the decision of this Court in the case of CIT v. Ashish Jhunjhunwala reported in [2015] (12) TMI 905 (Cal), and the decision in Pr. CIT v. Britannia Industries Limited I.T.A.T./45/2017 dated July 19,2018. It was pointed out that the assessee has to make a claim (including a claim that no expenditure was incurred) with regard to the expenditure incurred for earning income which is not chargeable to tax. Such a claim has to be examined by the Assessing Officer and only if an objective satisfaction is arrived at by the Assessing Officer that the claim made by the assessee cannot be accepted, the Assessing Officer can then proceed to ....