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TMI Blog2013 (11) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition of Rs.87,39,536/- made by the Assessing Officer u/s. 14A r.w.r 8D." 3. Facts in brief as emerged from the corresponding assessment order passed under Section 143(3), dated 31.12.2010 were that the assessee co-operative society is in the business of procuring of milk and manufacturing of milk products. It was noted by the AO that the assessee had claimed deduction of Rs.2,28,90,110/- u/s. 80P(2)(d) of IT Act on account of interest receipt. The assessee has also claimed deduction u/s. 80P(2)(d) of Rs.82,44,575/- on account of dividend received. It has also been noted by the AO that the assessee had debited an interest of Rs.7,64,45,713/-. The query of the AO was that the interest paid on loans borrowed by the assessee was mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest and dividend income claimed to be deductible under Chapter VIA of the act, we rely on the decision of Hon'ble ITAT Chennai in the case of Tamil Nadu Silk Producers Federation Ltd. reported at 105 ITD 623 wherein it was held that:- The provisions of section 14A cannot be applied to the provisions of Chapter VI-A (sections 80A to 80U) where deductions are to be made in computing the total income and in no way that can be compared of Chennai Tribunal are disclosed herewith vide Exhibit D." 3.2 On due consideration of those facts, it was held that the AO had failed to establish any nexus between borrowed funds and the investment made to earn exempt income. Learned CIT(A) has further observed that it was found that the assessee had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the provisions of Section 14A are to be attracted in relation to income which does not form part of the total income, i.e., an income exempt under the Act. In this regard, a decision of ITAT Chennai Bench pronounced in the case of Tamil Nadu Silk Producers Federation Ltd. (supra) has been cited. Respectfully following this decision as also considering the totality of the facts and circumstances of the case, we are of the considered opinion that learned CIT(A) has rightly held that the provisions of Section 14A have wrongly been invoked in this case. In the result, we hereby affirmed the finding of learned CIT(A) and dismiss this ground of the Revenue. 5. Ground No.2 is reproduced below: "The ld. Commissioner of Income-tax(A)-XV, Ahmedab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Ahmedabad, Bench 'A' Ahmedabad, in ITA No.1362/Ahd/2009 For A.Y. 2006-07, order dated 22/01/2010. (iii) ITAT Ahmedabad, Bench 'A' Ahmedabad in ITA No.2047/Ahd/2010 For A.Y.2007-08, order dated 09.11.2012. 7. A consistent view has been taken that the assessee is primarily entitled to claim the deduction u/s. 80IB in respect of the units under consideration. However, it was directed that the assessee is required to furnish certain information in respect of computation of the profit. We have noted that for the year under consideration even learned CIT (A) has also addressed the issue of quantification of admissible deduction by referring few decisions of the Tribunal. He has directed the AO to work out the quantum of the deduction in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat action of the AO was contested before learned CIT(A). 10.1 It was held by learned CIT(A) that the main order under Section 154 was passed by the AO on 14.3.2011 whereas the learned CIT(A) has passed the order on 4.8.2011. According to him the AO had passed the order when there was no matter subjudis in appeal. It was also noted by learned CIT (A) that the relief granted by his predecessor was now contested by the Revenue Department before the Hon'ble Tribunal. In his opinion the merit of disallowance u/s 14A was not required to be considered by him but he has to decide primarily that the rectification was rightly made by the AO u/s 154 of the IT Act or not. It was held that the provisions of Section 154 were correctly invoked by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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