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TMI Blog2022 (9) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... day of April, 2007 in any North-Eastern States. On a reading of the order passed by the assessing officer we find that the assessing officer has missed out one of the categories which have been mentioned in Clause (b) of Section 80IC(2). The assessee would squarely fall within the category of undertakings or enterprises which manufactures or produces any article or thing as specified in the Fourteenth Schedule as the assessee is a mineral based industry which finds place in clause-16 of Part-A of the Fourteenth Schedule. Thus, we are the of the view that the learned tribunal rightly affirmed the conclusion arrived at by the CIT(A). In the result, the appeal filed by the revenue is dismissed and substantial question of law which was common in all the three appeals is answered against the revenue. Addition u/s 14A r.w.r. 8D - Necessity of recording satisfaction - HELD THAT:- The explanation submitted by the assessee while framing the assessment proceedings was rejected by the assessing officer without adducing any reasons nor any defect was pointed out by the assessing officer at the time of assessment and straightway the assessing officer applied the machinery provision u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xus between borrowings and investments could be established especially when investments and regular business are run out of distinctly separate bank accounts, rule 8(iii) of the Income Tax Rules, 1962 cannot be invoked ? (ii) Whether on the facts and circumstances of the case, the learned Tribunal erred in law in deleting an amount of Rs.1,17,99,000/- /Rs.1,03,70,000/- added by the Assessing Officer under Section 14A of the Act read with Rule 80D(ii) of the Rules? 4. The decision rendered by the learned Tribunal for the assessment year 2008-09 had been followed by the tribunal for two other assessment years namely, assessment year 2010-11, which was the subject-matter of ITA/65/2021 and assessment year 2011-12 which was the subject matter of ITA/159/2018. Therefore, ITA/39/2021 is the lead case and any decision taken in the said appeal would automatically be applicable to the two other appeals namely, ITA/159/2018 and ITA/65/2021. 5. We have heard Ms. Smita Das De, learned standing counsel appearing for the appellant/revenue in ITA/159/2018 and ITA/39/2021 and Mr. Aryak Dutt, learned counsel for the Union of India in ITA/65/2021; also Mr. J.P. Khaitan, leaned senior co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction was allowed for the assessment years 2004-05 and 2005-06 with effect from 1st April, 2005. The other company got amalgamated with the assessee and the assessee was granted the benefit of deduction under Section 80IC of the Act for the assessment years 2006-07, 2007-08 and 2009-10. For the subject assessment years 2008-09, 2010-11 and 2011-12 which are the subject-matter in these three appeals the deduction was disallowed. The reasoning of the assessing officer in all these three years is that the assessee has not undertaken any expansion. As rightly noted by the CIT(A), a consistent approach is required to be adopted by the department unless and until the department is able to establish a factual distinction in a particular assessment year to justify a different course of action. Admittedly, the assessing officer has not pointed out any such factual distinction. That apart, on a reading of Section 80IC(2)(b) of the Act, it is evidently clear that benefit is available to all existing undertakings and they are entitled to claim deduction under Section 80IC of the Act. Therefore, the CIT(A) while rightly interpreting the provision held that the assessing officer was not justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies to any undertaking or enterprise which has begun or begins to manufacture or produce any article or thing specified in the Fourteenth Schedule or commences any operation specified in that Schedule. The second category of undertakings are those which manufactures or produces any article or thing in the Fourth Schedule; and the third category being undertakings or enterprises which commenced operations specified in the Fourteenth Schedule and undertakes substantial expansion during the relevant period which is on 24th day of December, 1997 and ending before 1st day of April, 2007 in any North-Eastern States. 10. On a reading of the order passed by the assessing officer we find that the assessing officer has missed out one of the categories which have been mentioned in Clause (b) of Section 80IC(2). The assessee would squarely fall within the category of undertakings or enterprises which manufactures or produces any article or thing as specified in the Fourteenth Schedule as the assessee is a mineral based industry which finds place in clause-16 of Part-A of the Fourteenth Schedule. 11. Thus, we are the of the view that the learned tribunal rightly affirmed the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Britannia Industries Limited I.T.A.T./45/2017 dated July 19,2018. It was pointed out that the assessee has to make a claim (including a claim that no expenditure was incurred) with regard to the expenditure incurred for earning income which is not chargeable to tax. Such a claim has to be examined by the Assessing Officer and only if an objective satisfaction is arrived at by the Assessing Officer that the claim made by the assessee cannot be accepted, the Assessing Officer can then proceed to apply computation mode as provided in rule 8D(2) of the Rules. 14. The decision of the Hon ble Supreme Court in South Indian Bank Ltd. vs. Commissioner of Income Tax [2021] 438 ITR 1(SC) is also in aid of the case of the assessee as the tribunal has recorded specific finding that own funds were available with the assessee. The relevant paragraphs are quoted hereunder: 27. The aforesaid discussion and the cited judgments advise this Court to conclude that the proportionate disallowance of interest is not warranted, under section 14A of the Income-tax Act for investments made in tax-free bonds/securities which yield tax-free dividend and interest to the assessee-banks in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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