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2013 (8) TMI 828 - AT - Income TaxDisallowance u/s 14A - Expenditure towards the earning of dividend income - CIT confirmed addition - Held that:- some expenditure out of the administrative expenses is always incurred and, therefore, it is a matter of method of quantifying such attributable expenditure to the exempt income. It is a judicially finalized position in law that the provisions of Rule-8D read with section 14A cannot be invoked for the assessment years prior to AY 2008-2009 - Decided in favour of assessee. Quantification of such expenditure - Held that:- restricting the disallowance to 2% of the dividend income for this also must bring the peace between the parties for this AY 2005-2006 - Assessee is 100% Export Oriented Unit, invoking the provisions of section 14A of the Act has no tax implication. If any expenditure is disallowed under the said provisions, equalant amount needs to be reduced from the expenditure claimed in the P & L Account - Decided partly in favour of assessee. Deduction u/s 10A - Reduction of insurance and communication expenses from Export Turnover - Held that:- export turnover means consideration in respect of the export received by the assessee in convertible foreign exchange. But it does not include freight telecommunication charges or insurance attributable to the delivery of the stocks outside India or expenses incurred in foreign exchange in providing technical services outside India. Thus, the expenses incurred in local currency in India on account of telecommunications and insurance are outside the scope of the above said definition given in clause-(iv). It is not the case of the assessee that such expenses on account of telecommunication insurance are incurred outside India. In fact, it is an admitted position that the said expenditure was incurred in local currency in connection with different location within India - Decided in favour of assessee.
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