9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 609 - AT - Income TaxDisallowance of the claim for deduction u/s 80IA - Operating and maintaining CFS facility - HELD THAT - Issue is squarely covered by the Hon ble Supreme Court decision in assessee s own case 2018 (5) TMI 359 - SUPREME COURT wherein the assessee has been allowed to claim deduction under Section 80IA as the assessee is developing, operating and maintaining infrastructure facilities in the port area and is Container Freight Station which comes within the definition of port as per subsequent clarification issued by the JNPT on 24.10.2007. Thus, the Ground No. 1 2 of Revenue s appeal are dismissed. Disallowance u/s 14A - assessee has made suo moto disallowance on the dividend income - AO has made the disallowance on expenditure at 0.5% with the specific disallowance that total interest expenditure incurred by the assessee And assessee has not disallowed interest and expenses as provided under Rule 8D as prescribed under Section 14A - HELD THAT - There was a clear satisfaction that assessee has not made any disallowance on expenditure. Thus, the CIT(A) was not correct in holding that no satisfaction was recorded by the AO. But the contention of the assessee that the AO should have taken only those shares of Mutual Fund and equity shares which resulted in earning tax from dividend income appears to be just and proper and the working of disallowance under Rule 8D(2)(iii) determined by AO should be restricted to Rs. 2,30,935/- as the assessee has earned exempt income of Rs. 6,52,761/-. Thus, we direct the AO to restrict the disallowance as per Rule 8D(2)(iii) to the extent of Rs. 2,30,935/-. Ground Nos. 3 4 of Revenue s appeal are partly allowed. Education cess SHEC under Section 40 of the Income Tax Act is squarely covered by the decision of Hon ble Bombay High Court in case of Sesa Goa Ltd. 2020 (3) TMI 347 - BOMBAY HIGH COURT Deduction under Section 80IA on the rental income - HELD THAT - It is the requirement of the business that the separate block for user agencies quipped with basic facilities and for accommodation for bank are mandatory for the assessee as per the Ministry of Commerce guidelines. Thus, claiming deduction under Section 80IA on the rental income is just and proper. There is no need to interfere with the finding of the CIT(A) Ground No. 6 is dismissed.
Issues:
1. Disallowance of deduction under Section 80IA of the Act. 2. Disallowance under Section 14A. 3. Disallowance of claim for deduction in respect of payment of education cess and SHEC under Section 40. 4. Treatment of rental income as business income and eligibility for deduction under Section 80IA. Issue 1: Disallowance of deduction under Section 80IA of the Act: The Revenue challenged the deletion of the addition made by the AO on account of disallowance of the claim for deduction under Section 80IA. The Revenue argued that the assessee did not fulfill the conditions set out under Section 80IA(4) as the infrastructure facility did not meet the definition of a port. However, the assessee contended that the facility was approved by JNPT authority, which clarified the definition of a port to include the Container Freight Station (CFS). The Tribunal relied on a previous Supreme Court decision in the assessee's case and dismissed the Revenue's appeal, upholding the eligibility of the assessee for claiming deduction under Section 80IA. Issue 2: Disallowance under Section 14A: The Revenue contested the deletion of the addition made by the AO on account of disallowance under Section 14A. The AO had disallowed expenses based on Rule 8D, despite the assessee making a suo moto disallowance on dividend income. The Tribunal found that while the AO had recorded satisfaction for disallowance, the disallowance amount needed adjustment based on the exempt income earned by the assessee. The Tribunal partially allowed the Revenue's appeal, directing the AO to restrict the disallowance under Rule 8D. Issue 3: Disallowance of claim for deduction under Section 40: The Revenue raised concerns regarding the disallowance of the claim for deduction in respect of payment of education cess and SHEC under Section 40. The Tribunal dismissed this ground, citing a decision of the Bombay High Court where a similar claim was allowed. Thus, the Tribunal upheld the decision of the CIT(A) on this issue. Issue 4: Treatment of rental income as business income and eligibility for deduction under Section 80IA: The Revenue disputed the CIT(A)'s decision to treat rental income as business income eligible for deduction under Section 80IA. The Tribunal upheld the CIT(A)'s finding, stating that the rental income was essential for the business activities of the assessee, as mandated by Ministry of Commerce guidelines. The Tribunal dismissed the Revenue's appeal on this issue, agreeing with the CIT(A)'s detailed findings. In conclusion, the Tribunal partially allowed the Revenue's appeal on the issue of disallowance under Section 14A, directing the AO to adjust the disallowance amount. However, the Tribunal dismissed the Revenue's appeal on the other issues, upholding the CIT(A)'s decisions regarding deduction under Section 80IA, claim for deduction under Section 40, and treatment of rental income as business income.
|
