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TMI Blog2010 (10) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandigarh Bench 'A', Chandigarh (in short "the Tribunal") in ITA No. 594/Chandi/2008 in respect of the assessment year 2004-2005. Briefly stated the facts of the case are that the respondent-assessee filed its return for the assessment year 2004- 2005 on 1.11.2004, declaring an income of ₹ 49,71,52,397/- and subsequently filed revised return on 20.3.2006 declaring same income of ₹ 49,71,52,397/-. The case of the appellant came under scrutiny and the assessment was completed under Section 143(3) of the Act vide order dated 29.12.2006 at an income of ₹ 54,54,96,270/- wherein the assessing officer made certain additions as noticed in the order (Annexure A-1). Aggrieved by the order of the assessing officer, the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure A-2 was challenged in appeal by the Revenue before the Income-tax Appellate Tribunal (for short "the Tribunal"). The Tribunal, vide order dated 20.11.2009, Annexure A-3, set aside the finding of the CIT(A) on the issue with regard to interest on loan to the sister concern and directed the assessing officer to re-compute the claim for deduction under Section 80HHC in accordance with the ratio laid down in the judgment of the Gujarat High Court in CIT v. Gasketes & Radiators Distributors, (2006) 206 CTR 209 and that of the Supreme Court in CIT v. Lakshmi Machine Works (2007) 290 ITR 667 (SC). As regards the addition on account of apportionment of expenses under Section 14A which was upheld to the extent of ₹ 25 lacs, was deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, whether the ITAT is legally justified in not sustaining the disallowance of deduction u/s 80-IA, without appreciating that in view of the assessee's failure to lead the relevant evidences, the AO was justified u/s 114 of the Indian Evidence Act to take an adverse view. v) In the facts and circumstances of the case, whether or not the mere shifting of profit from one unit to the other by making adjustments of the expenses booked and claiming deduction u/s 80-IA thereon is a colourable device to reduce the tax liability and as such the case stands covered by the ratio of the decision of the Hon'ble Apex Court in the case of Mc Dowell Ltd. vs. CTO (154 ITR 148) (SC). vi) In the facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of this Court. Adverting to question No.7 claimed by the Revenue, the Tribunal had directed the Assessing Officer to delete the disallowance of ₹ 25 lacs made under Section 14A of the Act. While doing so, the Tribunal in paras 43 to 45 of its order, held as under: "43. The question for adjudication is, whether any disallowance is warranted under Section 14A of the Act in a case where the assessee claims to have made the investment in the shares of Indian Companies, in the past years and the dividend income from which is claimed as exempt. The claim of the assessee before the authorities below is that no part of the interest expenditure is attributable to the investments made in shares of Indian companies as the said investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred, disallowance under section 14A cannot stand. In the present case, finding on this aspect, against the Revenue, is not shown to be perverse. Consequently, disallowance is not permissible. We have taken this view earlier also in ITA No. 504 of 2008 (Commissioner of Income Tax Chandigarh-II Vs. M/s. Winsome Textile Industries Limited, Chandigarh) decided on 25.8.2009, wherein it was observed as under: "6. Contention raised on behalf of the assessee had made investment in shares out of its own funds, the assessee had taken loans on which interest was paid and all the money available with the assessee was in common kitty, as held by this Court in CIT Vs Abhishek Industries Limited, (2006) 286 ITR 1 and, therefore, disallowance under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arning of dividend income during the year, held that no disallowance u/s 14A of the Act was warranted and accordingly, directed the Assessing Officer to delete the disallowance of ₹ 25 lacs made under Section 14A of the I.T. Act. Learned counsel for the appellant submitted that this Court should re-appreciate the evidence and record a fresh conclusion on the basis thereof. He, however, could not point out any mis-reading or mis-appreciation of evidence which may impel this Court to conclude that the findings recorded by the Tribunal, were erroneous or perverse in any manner. In view of the above, we are of the opinion that the substantial questions of law proposed by the Revenue do not arise that may attract attention of this Court f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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