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TMI Blog2019 (9) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aitanya Anjaria ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)- 57, Mumbai [hereinafter in short Ld.CIT(A) ] for the A.Y. 2011-12. 2. Assessee has raised the following grounds in its appeal: - 1. (a) In the facts and circumstances of the case of the appellant, the learned CIT (A) erred in confirming an addition of ₹ 521,193 made by the learned AO by taking the fair arm's length interest rate in respect of loans given to associated enterprises (ae) @ 10.50 % as against interest rate of 5% charged by the appellant. (b) While confirming the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer while completing the assessment invoking Rule 8D of I.T. Rules made disallowance of ₹ 27,179/- towards interest under Rule 8D(2)(ii) of I.T.Rules and 0.5% of the average investments towards administrative expenses at ₹ 5,56,631/- under Rule 8D(2)(iii) of I.T. Rules, totaling to ₹ 5,83,810/-. It was contended before the Assessing Officer that assessee earned only share of profit and has not incurred interest expenses or any other expenses to earn share of profit from the partnership firm and therefore, the provisions of section 14A are not applicable to share of profit from partnership firm since the same is subject to tax in the hands of the partnership firm. However not agreeing with the contentions of the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 [402 ITR 640]. 9. The assessee also submitted that investments to the extent of ₹ 18,37,500/- 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. The contention of the assessee has to be examined by the Assessing Officer 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 view the decision of the Hon'ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, it was submitted that there was no justification for any other allocation of expenses from head office. Not convinced with the submissions of the assessee the Assessing Officer allocated administrative, selling and other expenses and Directors remuneration on the basis of the turnover between SEZ and non-SEZ units. Accordingly, the Assessing Officer restricted the deduction u/s.10AA of the Act. on appeal the Ld.CIT(A) sustained the action of the Assessing Officer in allocating the expenses on sales to turnover basis between SEZ Unit and non-SEZ Unit. However, he directed the Assessing Officer to exclude Directors remuneration of ₹ 1,20,000/- from allocation and disallowance. 12. Ld. Counsel for the assessee bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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