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2015 (11) TMI 59 - AT - Income TaxDisallowance of claim under section 10B - Held that - The source of the information for the AO for ascertaining the date of commercial production i.e. year 1997 was form 56G which is certificate issued by the Chartered Accountant for claiming the deduction under section 10B of the Act. There was a letter issued by the Ministry of Industry, Government of India in the year 1997 for registering the assessee with Secretariat for Industrial Assistance(SIA for short) for availing these facilities and privileges admissible under the 100% export oriented scheme, probably, that date has been recorded by the Chartered Accountant as the year of production. However, the date of registration as SIA and the date of commencement of the commercial production for the deduction u/s 10B of the Act are two different things and has no nexus of whatsoever. So on this basis we conclude that the year of production is 2000-01 as per the letter submitted to the Development Commissioner MEPZ and the assessee is entitled for deduction under section 10B of the Act for the present assessment year i.e., 2009-10 under consideration - Decided in favour of assessee. Disallowance under section 14A - CIT(A) deleted the addition - Held that - The AO has invoked the rule 8D of the Act because he disallowed the claim for deduction under section 10B of the Act. So the assessee was to pay the taxes under the normal provisions of the Act rather than under the provisions of MAT under section 115JB of the Act. However Ld.CIT(A) has restored the claim of assessee for the deduction u/s 10B of the Act, so even otherwise, the deduction claim by the assessee is disallowed by the Ld. CIT(A) then the assessee will be entitled to claim the deduction u/s 10B of the Act. Accordingly Ld. CIT(A) has deleted the addition made by AO. From the aforesaid discussion it is revealed that the assessee is entitled for the claim of deduction under section 10B of the Act which will include the disallowance, if any, made under section 14A of the Act. - Decided in favour of assessee.
Issues:
1. Eligibility for deduction under section 10B of the Income Tax Act for assessment year 2009-10. 2. Allowance of relief to the assessee under section 14A of the Act for exempted income. Issue 1: Eligibility for deduction under section 10B of the Income Tax Act for assessment year 2009-10: The appeal by the Revenue challenged the order of the Commissioner of Income Tax (Appeals) VIII, Kolkata regarding the deduction under section 10B of the Act for the assessment year 2009-10. The Revenue contended that the last eligible assessment year for the deduction under section 10B was 2008-09, not 2009-10. The AO had disallowed the deduction based on the commencement of production in 1997 as per Form No. 56G. However, the CIT(A) allowed the deduction for the assessment year 2009-10, stating that the commercial production began in 2000-01. The Tribunal observed that the date of registration with SIA in 1997 was not the same as the commencement of commercial production in 2000-01. Therefore, the assessee was entitled to the deduction under section 10B for the assessment year 2009-10. Issue 2: Allowance of relief to the assessee under section 14A of the Act for exempted income: The second issue raised by the Revenue was the allowance of relief to the assessee under section 14A of the Act for exempted income. The assessee had earned dividend income but failed to make any disallowance of expenditure under section 14A. The AO disallowed expenses under section 14A, which was added back in computing the book profit under section 115JB. The CIT(A) deleted the addition made by the AO, stating that the disallowance was more than the actual income earned and that there was no warrant for any disallowance under section 14A. The Tribunal noted that since the CIT(A) restored the deduction under section 10B, the assessee was entitled to claim the deduction, which would include any disallowance under section 14A. Therefore, the Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the decisions of the CIT(A) regarding the eligibility for deduction under section 10B and the allowance of relief under section 14A of the Income Tax Act.
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