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TMI Blog2011 (4) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consequently the said disallowance was made out of the interest payment. It was the submission that the learned CIT(A) had also upheld the disallowance but he took recourse to the provisions of section 14A. It was the submission that the amount was not taxable during the assessment year 2003-04 as the provisions of sec. 115-O was not applicable during the relevant assessment year. 4. In reply the learned DR vehemently supported the orders of the Assessing Officer and the learned CIT(A). 5. We have considered the rival submissions. A perusal of the assessment order clearly shows that the Assessing Officer has not invoked the provisions of sec. 14A. In fact the Assessing Officer has pointed out that the total investment in shares as on 31.03.2003 was Rs. 26,00,31,694/- which included a sum of Rs. 5,28,82,350/- invested during the year. No dividend income has also been admitted during the relevant assessment year. A perusal of the order of the learned CIT(A) clearly shows that the assessee had put forward the plea that it had surplus and reserves sufficient to cover such investment in purchase of shares. This is found in para 3 of the order of the learned CIT(A). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e warehouse and the assessee was paying rent on the warehouse and as portions of the warehouse had been used by the group companies of the assessee the expenses in relation to the warehouse representing the rent as also the manpower had been recovered from the group companies. It was the submission that this had been shown as an income in the Profit and Loss account. It was the submission that the discount represented the discount received by the assessee which was also shown by the assessee in the income side of the Profit and Loss account. It was the submission that the same was not liable to be considered for exclusion when computing the deduction u/s. 80HHC. 7. In reply, the learned DR submitted that in regard to the issue of discount no specific ground had been raised and consequently the same could not be considered. In regard to the issue of the share of expenses it was the submission that the share of expenses which was claimed was in fact the rentals and rent itself was a specific item which was specified to be reduced by 90% as per the provisions of clause (baa) of Explanation to section 80HHC. It was the submission that it was the gross rent which was liable to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducing the deduction under section 80-IB of the Act. It was submitted that the issue was squarely covered by the decision of the Hon'ble jurisdictional High Court in the case of CIT v. M/s. MRF Ltd. in Tax Case (Appeal) No. 1020 of 2009 dated 27- 10-2009 wherein the Hon'ble jurisdictional High Court has held as follows: "5 It is submitted across the bar by the learned counsel appearing for either side that the very issue has been considered and held against the revenue by the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. vs. Commissioner of Income Tax reported in (1998) 229 ITR 123. It has also been further submitted that the Bombay High Court also has taken the same view in the case of Commissioner of Income-tax vs. Nima Specific Family Trust reported in (2001) 248 ITR 29. The judgment of the Madhya Pradesh High Court has been taken to the Supreme Court and the Supreme Court in Joint Commissioner of Income-tax vs. Mandideep Engineering and Packaging Industries P. Ltd., (2007) 292 ITR 1, has rejected the S.L.P., by giving the following reasons: "...2. The Madhya Pradesh High Court in J.P. Tobacco Products P. Ltd. v. CIT reported in (1998) 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tands reversed and the Assessing Officer is directed to grant deduction under section 80HHC without reducing the deduction u/s. 80IB of the Act. 12. In regard to grounds 7(a) to 7(e) it was submitted by the learned authorised representative that the issue was against the action of the learned CIT(A) in confirming the order of the Assessing Officer in restricting the deduction u/s. 80-IB. It was fairly agreed by both the sides that the issue was squarely covered by the decision of the co-ordinate Bench of this Tribunal in the assessee's own case in ITA No. 1294/Mds/05 and ITA No. 1480/Mds/05 dated 27-07-2009 wherein in para 8 of the said order the co-ordinate Bench of this Tribunal has held as follows: "8. The last issue raised on behalf of the assessee is that Commissioner (A) erred in upholding the order of the AO that proportionate management fees attributable to Pondicherry Unit has to be reduced in computing the profits of eligible business under sec.80IB. This issue has to be restored to the file of AO to consider the actual expenses in view of the order of the Tribunal in the case of Food Specialities Ltd. vs. ACIT reported in 54 ITD 352 wherein it is held as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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