TMI Blog2014 (7) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has carried out investment activities of purchasing, liquidating etc. and has also received dividend income. Hence, the contention of the assessee that it did not incur any expenditure is not acceptable to us also. Hence, we are of the view that it would be proper to make disallowance of a portion of general expenses in terms of of sec. 14A of the Act. Accordingly, we are of the view that a round sum disallowance of ₹ 25,000/- may be made to take care of sec. 14A of the Act and in our view, the same would meet the ends of justice. We order accordingly. The order of Ld CIT(A) stands modified accordingly. - I.T.A. No. 5736/Mum/2012, I.T.A. No. 5809/Mum/2012 - - - Dated:- 31-7-2014 - S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) Appellant by : Shri Falee H Bilimoria Respondent by : Shri Sanjeev Jain ORDER Per B.R.BASKARAN, Accountant Member: These cross appeals and the cross-objection filed by the assessee are directed against the order dated 01.06.2012 passed by Ld CIT(A) and they relate to the assessment years 2008-09. 2. In the appeal by the revenue, the decision of ld. CIT(A) in holding that the insurance expenses and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Export turnover . However, the AO did not accept the said submissions and accordingly computed the deduction u/s 10A of the Act by deducting the amount of communication charges and insurance expenses referred above from the Export turnover. However while doing so, the assessing officer did not deduct the above said amount from Total turnover . 6. The AO noticed that the assessee has earned dividend of ₹ 15,07,890/- and claimed the same as exempt u/s 10(34) of the Act. The assessee submitted before AO that it has used only its surplus funds in making investments and also it did not incur any expense in earning the dividend income. The AO, however, did not accept the said contentions and computed the disallowance is required to be made out of general expenses in terms of Rule 8D(2)(iii) of the Act at 0.5% of the average investments, which worked out to ₹ 3,93,579/-. The assessing officer disallowed the above said amount u/s 14A of the Act while computing income under normal provisions of the Act. The AO also made the said disallowance while computing book profit u/s 115JB of the Act. 7. The assessee challenged the order passed by the AO by filing appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure relatable to any income to which sec. 10 of the Act applies is required to be added to the Book Profit. Accordingly, the ld CIT(A) dismissed the claim of the assessee. 10. Aggrieved, by the order passed by Ld CIT(A), both the parties have filed appeals / Cross objection before us on the issues discussed above. 11. We shall first take up the appeal filed by the revenue, wherein the question relates to the deduction of telecommunication charges and insurance expenses from the Export turnover for computing deduction u/s 10A of the Act. We have already noticed that the Ld CIT(A) had followed the decision rendered by his predecessor while deciding this issue in favour of the assessee, i.e., in the earlier years, the then Ld CIT(A) had accepted the contentions of the assessee that these expenses were not attributable to the delivery of articles or things or computer software outside India. We notice that the identical issue came to be considered by the co-ordinate bench of Tribunal in the assessee s own case in ITA No.4932/M/2010; ITA 6003/M/2010 and ITA 6194/M/2011 relating to AY 2005-06, 2006-07 and 2007-08. 12. In the above said years, the co-ordinate bench of Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduction should be made both from the Export turnover and from Total turnover. We notice that the contention of the assessee gets support from the following decisions:- (a) ITO Vs. Saksoft Ltd (313 ITR 353)(SB-Chennai) (b) IBS software services Pvt Ltd (2011)(137 TTJ (Coch) 54 (c) Gem Plus Jewellery India Pvt Ltd (223 CTR 248)(Bom) (d) CIT Vs. Dell Intl. Services India (P) Ltd (ITA No.450/2008)(Kar). Following the above said decisions, we agree with the contentions of the assessee and accordingly direct the AO to deduct corresponding amount from total turnover also, if any amount is deducted from the Export turnover. 15. We shall now take up the appeal filed by the assessee. At the time of hearing, the Ld A.R fairly admitted that the issue relating to applicability of provisions of sec. 14A of the Act to the computation of Book Profit u/s 115JB of the Act has since been decided against the assessee by Hon ble Delhi High Court in the case of CIT Vs. Goetze (India) Ltd (361 ITR 505). He further submitted that the decision rendered by the Co-ordinate bench of Mumbai ITAT in the case of RBK Stock Broking (P) Ltd (159 TTJ 16) is now upheld in the case of Goetze (In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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