2014 (12) TMI 1404

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....t year, was carrying on the business of manufacture and sale of pure ghee, skimmed milk powder, whole milk powder etc., under the name and style of "Milk Food" The company supplies skimmed milk powder to major institutions i.e. Nestle, SKB, Wockhart and Mother Dairy etc. It had filed its return of income, declaring 'Nil" income. In reply to AO's query regarding disallowance u/s 14A, the assessee, inter alia, pointed out that since it had not received any dividend, what-so-ever, from the investment made, section 14A was not applicable. The AO, after considering the assessee's reply did not accept the same and computed the disallowance u/s 14A read with Rule 8D at Rs. 15,90,440/-. 2.1. The AO further made a disallowance of Rs. 80,409/- und....

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....assessee and receipts from all sources go in common kitty? 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the proposition laid down by the Hon'ble Supreme Court in the case of Apollo Tyres Ltd. Does not allow the AO to calculate tax u/s 115JB by making additions in the book profit, completely ignoring the provision clause (f) of Explanation 1 of section 115JB which clearly states that book profit will be increased by amount of expenditure relatable to any exempt income. 6. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 7. That the grounds of appeal are without prejudice to each other. 7. That the appellant craves leave to ....

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....the Revenue. Accordingly, ground no. 1 is dismissed. 7. Ground nos. 2,3 & 4: The AO following the order for A.Y. 2006/07, disallowed a sum of Rs. 80,406/-, out of interest claimed u/s 36(1)(iii). Ld. CIT(A) has restored the matter to the file of AO, observing as under:  "6.1. Grounds of appeal no. 3 & 4 relate to the same issue of disallowance of interest of Rs. 80,406/- under section 36(1)(iii) of the Income Tax. This issue has been discussed at length in my appellate order in the case of the same assessee in AY 2005- 06 and 2006-07. The applicability of the Hon'ble Supreme Court decision in the case of SA Builders has also been dealt therein. Therein, it has been established that the appellant has forwarded interest free ....