ACIT v. IFFCO Ltd. - Taxpublishers.in

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The Tax Publishers2021 TaxPub(DT) 1125 (Del-Trib)

INCOME TAX ACT, 1961

Section 14A

Tribunal in assessee's own case had decided to exclude the investment in OMIFCO-Oman for the purpose of the computing disallowance in terms of rule 8D(2)(iii) of the Rules, since dividend income from OMIFCO-Oman was not in the nature of the exempted income, therefore, finding of CIT(A) of computing disallowance under section 14A after excluding the dividend income from OMIFCO-Oman was upheld.

Disallowance under section 14A - Expenditure incurred against earning of exempted income - Dividend income earned from overseas joint-venture -

Order of assessment was passed by AO under section 143(3) making a disallowance under section 14A invoking provisions of rule 8D of Income Tax Rules, 1962. While working out the said disallowance, AO included dividend income from its joint-venture OMIFCO-OMAN in exempted income. Dividend income from co-operative societies, for which deduction under section 80P(2)(d) was available to the assessee, was not included in dividend income for disallowance. Held: Tribunal in the case of assessee for assessment years 2008-09 in ITA No. 2394 and 3012/Del/2013, wherein Tribunal had decided to exclude the investment in OMIFCO-Oman for the purpose of the computing disallowance in terms of rule 8D(2)(iii) of the Rules. Dividend income from OMIFCO-Oman was not in the nature of the exempted income, following the finding of Tribunal, finding of CIT(A) of computing disallowance under section 14A after excluding the dividend income from OMIFCO-Oman was upheld and ground of the appeal of the Revenue was accordingly dismissed.

Followed:CIT v. Holcim India (P) Ltd. [ITA Nos. 486 and 299/2014, dt. 5-9-2014] : 2014 TaxPub(DT) 3780 (Del-HC), CIT v. M/s. Shivam Motors (P) Ltd. [ITA No. 88 of 2014, dt. 5-5-2014] : 2014 TaxPub(DT) 4333 (All-HC), CIT v. M/s. Lakhani Marketing Incl [ITA No. 970/2008, dt. 2-4-2014] : 2014 TaxPub(DT) 2458 (P&H-HC), CIT v. Corrtech Energy (P) Ltd. (2014) 223 Taxman 130 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC), CIT v. Kribhco (2012) 349 ITR 618 (Del) : 2012 TaxPub(DT) 2742 (Del-HC), CIT v. Indian Farmer Fertilizer Cooperative [ITA No. 1293/2011 & C.M.No. 6731/2012, dt. 17-4-2012], Maxopp Investment Ltd. v. CIT (2012) 347 ITR 272 (Del) : 2011 TaxPub(DT) 2171 (Del-HC), CIT v. M/s. Hero Cycles Ltd. (2010) 323 ITR 518 (P&H) : 2010 TaxPub(DT) 0960 (P&H-HC), CIT v. Winsome Textile Industries Ltd. (2009) 319 ITR 204 (P&H) : 2009 TaxPub(DT) 2012 (P&H-HC), M/s. Indian Farmers Fertiliser Cooperative Ltd. v. ACIT [ITA No. 2394/Del/2013, dt. 5-4-2018]

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : A.Y. 2007-08

IN THE ITAT, DELHI BENCH