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TMI Blog2021 (7) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s. 80IC of the Act, the eligibility of 100% deduction would start from initial A.Y. 2009-10. We further find that the AO has allowed the deduction from A.Y.2009-10 to 2012-13 which is evident from the assessment orders of the relevant assessment years on record. In our considered view the AO was not correct in disturbing the claim in the 5th year when earlier assessment years has not been disturbed. Hon ble Supreme Court in the case of PCIT Vs. Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT ] has decided this controversy in favour of the assessee and against the revenue. Disallowance u/s.14A - sufficiency of own funds - CIT(A) found that assessee had sufficient own funds to meet the investment and therefore, there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us year. 3 The Ld CIT(A) failed to appreciate the decisions of Hon ble Supreme Court in the case of M/s CIT vs United General Trust Ltd 200ITR 488/SC) in which it was held that expenditure in relation to earning of the exempt income are embedded in the indirect expenditures. 4 The Ld CIT(A) failed to appreciate that Circular No 5/2014 of Ministry of Finance CBDT which provides for disallowance of expenditure even where tax payer in the particular year has not earned any exempt income. 5 That the order of the Ld. CIT (A) being erroneous in law and on facts which needs to be vacated and the order of the AO be restored. 6 That the appellant craves leave to add or amend any one or more of the ground of the appeal as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. On the disallowance made u/s. 14A of the Act the CIT(A) found that assessee had sufficient own funds to meet the investment and therefore, there was no reason for the disallowance of interest on borrowed capital and accordingly deleted the disallowance. 8. Before us the DR strongly supported the assessment order. It is the say of the DR that there cannot be two initial assessment years for the eligibility of deduction u/s. 80IC of the Act. On the disallowance made u/s. 14A, the DR read the relevant findings of the AO. 9. The Counsel for the assessee reiterated what has been stated before the lower authorities. 10. We have carefully considered the orders of the authorities below. We find that the AO has disallowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of initial assessment year in the two sections, viz. Sections 80-IB and 80-IC are materially different. The definition of initial assessment year under Section 80-IC has made all the difference. Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law. (b) An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of Himachal Pradesh of the nature mentioned in clause (ii) of sub-section (2) of Section 80-IC, would be entitled to deduction at the rate of 100% of the profits and gains for five assessment years commencing with the initial as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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