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2014 (6) TMI 954 - AT - Income TaxDisallowance u/s 14A - Held that:- We apply the decision of CIT vs Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME Court] and in the view favourable to the assessee is followed. So, in principle, we hold that the authorities below have wrongly invoked section 14A in case of investments held as ‘stock-in-trade’ wherein the ‘exempt’ income by way of dividends is only incidental. It is also made clear that since there is no verification of the factual position of investments held as ‘stock-in-trade’, we accept the assessee’s contentions in principle only and remit the issue back to the Assessing Officer to determine the true factual position. The assessee’s alternative plea carries only an academic significance. The relevant ground is accepted for statistical purposes. UPS attached to the computers are part of computer systems and eligible for depreciation @ 60% and directed the Assessing Officer to allow depreciation on UPS @ 60% Restricting relief @ 90% of the tax paid in foreign countries - Held that:- CIT(A) has quoted a notification No.S.O 2123(E) dated 28.8.2008 clarifying that in such a case involving a DTAA, an income has to be included in the total receipts and the necessary relief is to be granted by ‘elimination’ method or as per the terms of agreement seeking to avoid double taxation. He relies upon Finance Act, 2012 inserting explanation 3 to section 90 making the notification retrospectively applicable. In this manner, the CIT(A) has directed the Assessing Officer to allow relief to the assessee as per the aforesaid notification. Section 115JB could not have been invoked in a bank’s case.
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