9911796707
TMI Blog2024 (12) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... r was emanated from the order of the Learned Assistant Commissioner of Income-tax, Circle 5(1)(1), Mumbai (for brevity the "Ld. AO") order passed under section 143(3) of the Act, date of order 12/12/2019. 2. The assessee has taken the following grounds:- "1.1. On the facts and in circumstances of the case and in law, the Learned National Faceless Appeals Centre ("Ld. NFAC) vide order dated September 5, 2024 under section 250 of the Income-tax Act, 1961 ("the Act") erred in confirming the disallowance under section 14A of the Act amounting to Rs. 5,84,43,732 made by the Learned Asst. Commissioner of Income tax 5(1)(1), Mumbai ("Ld. AO") vide order dated December 12, 2019 under section 143(3) of the Act. 1.2. The Appellant prays that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnational air transport services, which includes mainly the passenger and cargo services and other related services. During the impugned assessment year, the assessee earned dividend amount to Rs.7,52,32,425/- from the following Indian companies and foreign companies: - Air India SATs Rs.3,03,18,732 Cochin International Airport Limited Rs.2,81,25,000 Dividend from investment in foreign companies Rs.1,67,88,694 Total Rs.7,52,32,426 The dividend from investment in foreign companies directly taxed under the head "Income from other sources". The balance dividend amount to Rs.3,03,18,732/- and Rs.2,81,25,000/- which works out to total amount of Rs.5,84,43,732/- is charged to tax under section 14A read with rule 8D (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Singapore Airport Terminal Services) 43,61,81,530 43,61,81,530 2 Cochin International Airport Limited ("CIAL") 22,50,00,000 22,50,00,000 Total 66,11,81,530 66,11,81,530 In argument it is placed that the Ld.AO had calculated in different mode of calculation, which is as below:- "5.5 In view of the above, disallowance u/s 14A read with Rule BD ought to be made in this case. The constitutional validity of Rule 8D has been upheld by the Hon'ble Bombay High Court in the case of Godrej Boyce & Mfg. Co. Ltd. (234 CTR 1) wherein, it has been observed by the Hon'ble High Court that once the satisfaction is accorded by the assessing officer for making a disallowance u/s 14A then the procedure for computing disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When calculating disallowance under Section 14A, only those investments that yield exempt income are to be considered. Specifically, investments in "Air India SATS" and "CIAL" were found to yield dividend income. Based on this, 1% of the average annual investment amounting to Rs. 66,11,81,530/- has been computed as Rs. 66,11,815/-. Both parties have agreed to this addition under Section 14A read with Rule 8D. We further note that a similar view was upheld by the Delhi ITAT Bench-I in the case of Bharatiya International Limited vs. DCIT [(2024) 158 taxmann.com 239]. The relevant portion of paragraph 11.2 from that judgment states: "11.2 In the light of the submissions made on behalf of the assessee, no further disallowance under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
