TMI Blog2013 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ment contrary to the judgment relied upon by the assessee. Therefore confirm the same. In favour of assessee - ITA No.364/LKW/2011 - - - Dated:- 22-8-2012 - Sunil Kumar Yadav and Mehar Singh, JJ. Appellant Rep by: Shri Praveen Kumar, CIT (DR) Respondent Rep by: Shri Rakesh Garg, Adv. ORDER Per: Sunuil Kumar Yadav: This appeal is preferred by the Revenue against the order of the ld. CIT(A) on various grounds, which are as under:- 1. That the CIT (A)-II, Kanpur has erred in law and on facts in not appreciating the fact that the assessee has shown advances on flat bookings as income in Profit Loss a/c with an intention to inflate the revenue and thereby claim higher deduction u/s 80-IB and the conditions for claim of deduction u/s 80-IB are not fulfilled. 2. That the CIT (A)-II, Kanpur has erred in law and on facts in not appreciating the fact that no construction activity was undertaken even after the relevant previous year, yet the assessee had claimed deduction u/s 80-IB on the inflated profits. 3. That the CIT (A)-II, Kanpur has erred in law and on facts in not appreciating the fact that the assessee here has indulged in camouflaging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doing so there will neither be any revenue recognition in respect of Anand Gooba Garden Project nor claim of deduction under section 80IB(10) of the Act on this project shall be permitted. The Assessing Officer was further directed that in succeeding years, revenue in respect of Anand Gooba Garden Project are recognized as per normal method of accounting hitherto followed by the assessee and accepted by the Department. The Assessing Officer was also directed to recompute the closing valuation of work-in-progress in respect of this project and make sure that it is only this amount that is carried forward in the next year. Besides, direction was also given to the Assessing Officer to compute the tax liability under section 115JB of the Act as per the profits shown in the books of account of the assessee-company and also make further adjustments in respect of expenditure incurred on earning tax free income. 5. The order of the ld. CIT(A) is challenged before us by the Revenue on various grounds, but the ld. CIT (DR) emphatically objected the directions given by the ld. CIT(A) to the Assessing Officer for computation of the income in a particular manner. The ld. CIT (DR) has contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner. Therefore, the direction issued by the ld. CIT(A) to the Assessing Officer to compute the income in a particular manner does not appears to be in accordance with the provisions of law. Instead of sending the matter back to the Assessing Officer for computing the income, the ld. CIT(A) should have computed the income himself in a manner suggested in his order. So far as the findings on merit are concerned, none of the parties have any objection. Rather, the Revenue has only objected the claim of deduction under section 80IB of the Act, for which the ld. CIT(A) has also held that the assessee is not entitled to claim of deduction under section 80IB(10) of the Act in the impugned assessment year as there was no construction activity carried out at all during the year. Now the only issue left out is with regard to the mode of computation of income of the assessee. The ld. CIT(A) has already given his finding with regard to the mode and manner of computation of income. Therefore, we direct the ld. CIT(A) to compute the income himself in a manner prescribed by him in his order without interfering the findings on merit. 9. Ground No.5 relates to the restriction of administrative ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT Vs. Winsome Textiles Industries Ltd. 379 ITR 204 (Punjab Haryana). ii) CIT Vs. Prem Heavy Engineering Works Pvt. Ltd. 9 MTC 79 (Allahabad). iii) CIT Vs. Reliance Utilities Power Ltd. iv) CIT Vs. Radico Khaitan Ltd. 274 ITR 354 (Allahabad). v) In Maruti Udyog Ltd. vs. DCIT (2005) 92 ITD 119 (Del) the Hon'ble ITAT held that when the assessee has funds far in excess of amount invested in shares of other Companies, no disallowance could be made u/s 14A on the ground that the interest bearing funds were invested in earning tax free dividends. The Hon'ble ITAT further held that nexus between borrowed funds and investments can be said to be established only where it is shown that interest free funds are not available with the assessee. Similar view has been expressed by the Delhi Branch of ITAT in Escorts Ltd. Vs ACIT (2006) 102 TTJ 522 and the Madhya Pradesh High Court in the case of Shree Synthetic Ltd. Vs CIT Anr. 205 CTR 386. vi) The Punjab Haryana High court in case of CIT vs Hero Cycles Ltd. 31 DTR 307 have held that where there is a finding that no expenditure has been incu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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