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2019 (9) TMI 759 - ITAT MUMBAIDisallowance u/s. 14A r.w. Rule 8D - HELD THAT:- Contention of the assessee that the provisions of section 14A of the Act are not applicable to share of profit from partnership firm since the same is subject to tax in the hands of partnership firm is decided by the Special Bench of Ahmadabad Tribunal in the case of Shri Vishnu Anant Mahajan v. ACIT [2012 (6) TMI 297 - ITAT, AHMEDABAD] in favour of the Revenue holding that provisions of section 14A applies to the share of profit earned from partnership firm, following the said decision reject the contentions of the assessee. Contention of the assessee that provisions of section 14A have no application to strategic investments is also now settled by the Hon'ble Supreme Court in the case of Maxopp Investment Ltd. v. CIT [2018 (3) TMI 805 - SUPREME COURT]. Contention of the assessee that investments were made in the M/s. Minal International FZE Sharjha an overseas company, and therefore, the provisions of section 14A would not apply to such investments - Contention of the assessee has to be examined by the AO as to whether the dividends from M/s.Minal International FZE Sharjha are taxable or tax free and accordingly the provisions have to be applied. Assessing Officer shall also decide the issue keeping in the case of Maxopp Investment Ltd. v. CIT [2018 (3) TMI 805 - SUPREME COURT] and ACIT v. Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI]. Thus, this issue of disallowance u/s. 14A r.w. Rule 8D is restored to the file of the Assessing Officer to decide in view of the above observations, after providing adequate opportunity of being heard to the assessee. Deduction u/s. 10AA by allocation of expenses between SEZ and non-SEZ units of the assessee - contention of the assessee that assessee maintains separate Books of Accounts and the expenditure have been recorded on actual basis for both SEZ unit and non-SEZ unit - HELD THAT:- Observation of the Assessing Officer was that the assessee could not produce any evidences to show that assessee has actually incurred expenses for the particular unit. It was also the submission of the assessee that in none of the Assessment Years later to this assessment year, even in scrutiny assessments no such allocation was made restricting the disallowance u/s. 10AA. Assessee and also the observations of the Assessing Officer in the Assessment Order this issue has to be examined afresh by the Assessing Officer especially when separate Books of Accounts were maintained by the assessee for both the units. Thus, this issue is restored to the file of the AO for denovo adjudication in accordance with law.
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