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2012 (8) TMI 281 - ITAT MUMBAIDisallowance u/s 14A - assessee claimed dividend income as exempt u/s 10(33) - Held that:- On considering the magnitude of profit with the company and the investments made in these shares of Kothari group, it can be easily noticed that the profit for the relevant year itself was much more than the amount of investment & coming to the investments in the shares of Dena Bank in financial year 1996-1997 it is observed that the share capital of the company far exceeds the amount of investment in shares as at the end of such financial year - that if there be interest free funds available to the assessee sufficient to meet its investments and at the same time loan has been raised, it can be presumed that the investments were made from interest free funds - no disallowance u/s 14A in respect of the investments made by the assessee in the shares of three domestic companies - in favour of assessee. Disallowance u/s 43B - the assessee defaulted in depositing employees' contribution to provident fund and ESI within the permissible time - Held that:- Any amount referred to in section 43B, being the sum payable by the employer shall be allowed as deduction if it is paid before the due date of filing of the return - as the assessee has paid the sum though belated but before the date of filing of return the grievance of the assessee is accepted and objection of the Revenue is overruled - in favour of assessee. Disallowance foreign travel expenses - CIT(A) deleted the disallowance - Held that:- As immediately preceding assessment year in the Tribunal has held that no disallowance on account of foreign travel expenses can be sustained - in favour of assessee. Deduction u/s 80-IA(9) - whether relief u/s 80-IA/80-IB should be adjusted before allowing deduction u/s 80HHC - Held that:- As decided in Associated Capsules P. Ltd. Versus DCIT [2011 (1) TMI 787 - BOMBAY HIGH COURT ]that restriction u/s 80-IA(9) is not applicable at the stage of computing deduction u/s 80HHC but only at the stage of allowing deduction u/s 80HHC - in favour of assessee. Netting of interest receipts for the purpose of deduction u/s 80HHC - Held that:- As decided in Associated Capsules Pvt. Ltd. v. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA ] netting of interest is permissible - in favour of assessee. Exclusion of amount of excise duty from 'total turnover' for computing deduction u/s 80HHC - Held that:- As decided in Commissioner of Income-Tax Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT ]the excise duty is not includible in the 'total turnover' in the formula contained in section 80HHC - in favour of assessee. Treatment of profit on sale of DEPB license - deduction u/s 80HHC - Held that:- As decided in M/s Topman Exports Versus Commissioner of Income Tax, Mumbai [2012 (2) TMI 100 - SUPREME COURT OF INDIA ]that when DEPB is sold by a person, his profit on transfer of DEPB will be sales value of DEPB less its face value. It has further been held that DEPB is chargeable as income u/s 28(iiib) in the year in which such person applies for DEPB against the exports and profit on sale of DEPB is chargeable u/s 28(iiid) in the year in which he transfers DEPB - in favour of assessee. Reduction of 10% export incentives from the gross indirect cost - Held that:- As decided in HERO EXPORTS Versus C. I. T [2007 (11) TMI 13 - SUPREME COURT OF INDIA ]the principle of attribution is applicable to cases falling u/s 80HHC(3)(b) and therefore, part of indirect cost has to be apportioned to expenses incurred for earning export incentives. 10% of total income has been held as fair estimate in this case - in favour of assessee. Computation of 'book profit' liable for MAT u/s 115JB - reduction of book profit by deduction allowable u/s 80HHC (Export Benefit) - difference between eligibility and deductibility of deduction - Held that:- CIT(A) directed to reduce export profits based on book profit in the ratio of export turnover to total turnover and not the quantum of deduction as worked out u/s 80HHC relying on Ajanta Pharma Ltd. Versus Commissioner of Income Tax-9, Mumbai [2010 (9) TMI 8 - SUPREME COURT ]in which it has been held that clause (iv) of the Explanation to section 115JB covers full export profits of 100% as 'eligible profits' and the same cannot be reduced to 80% by relying on section 80HHC(1B) - in favour of assessee. Treatment to sale of scrap - computation of deduction u/s 80HHC - Held that:- As decided in CIT v. Bicycle Wheels (India) [2010 (10) TMI 496 - PUNJAB AND HARYANA HIGH COURT ] the sale of scrap cannot be excluded from 'total turnover' which shall increase the denominator of formula for determining the extent of benefit admissible to an assessee u/s 80HHC - CIT(A) was correct to direct the assessee in treating sale of scrap as part of 'total turnover' - against assessee. Levy of interest u/s 234D - Held that:- As there is no merit in the contention found raised by the assessee as the regular assessment in this case was completed on 16.02.2004 which is well after the cut off date of 1st June, 2003, in our considered opinion, the Assessing Officer was justified in charging interest u/s 234D - against assessee. Entitlement for credit in respect of minimum alternate tax paid by the amalgamating company - Held that:- As no factual details in this regard are available it will be just and fair if the Assessing Officer is directed to look into these aspects as per law and then decide the matter afresh - in favour of assessee by way of remand.
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