2013 (5) TMI 1018 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to the computation of deduction u/s 10B of the Income Tax Act, 1961 and the disallowance of expenditure u/s 14A r.w.r. 8D of Income Tax Rules, 1962.

Computation of deduction u/s 10B:
The assessee, a company engaged in manufacturing, processing, and exporting, filed its return declaring income as Nil, claiming deduction u/s 10B. The Assessing Officer made additions/disallowances, including deduction claimed u/s 10B. The CIT(A) partly allowed the appeal, citing the decision of the Special Bench of the Tribunal in a specific case. The Tribunal dismissed the Revenue's appeal, stating that expenses excluded from export turnover should also be excluded from total turnover for computing deduction u/s 10B.

Disallowance of expenditure u/s 14A:
The Assessing Officer disallowed an amount u/s 14A using Rule 8D, considering interest expenditure and average value of investments. The CIT(A) confirmed the disallowance, stating the interest had a nexus with investments. The Tribunal upheld the disallowance of interest u/s 14A but reduced the amount from &8377; 69,17,637 to &8377; 55.00 Lakhs, as Rule 8D was not applicable for the relevant assessment year. The appeal of the Revenue was dismissed, and the appeal of the assessee was partly allowed.

Separate Judgement by Judges:
No separate judgment was delivered by the judges in this case.