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TMI Blog2021 (2) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 835.9 lakhs (910.16 - 74.26) lakhs made by the Assessing Officer u/s 14A, as the assessee has claimed deduction of expenses in relating to income which is exempt from tax. 2. The appellant craves leave to add, alter or amend the grounds of appeal before or during the course of appellate proceedings before the Hon'ble ITAT. 2. Briefly stated facts of the case are that this is a second-round proceeding. Originally, the order of assessment dated 24/12/2010 was passed by the Assessing Officer under section 143(3) of the Income-tax Act, 1961 (in short 'the Act') making a disallowance under section 14A of the Act Rs. 4,21,43,45,000/- invoking provisions of Rule 8D of Income-tax Rules, 1962 (in short 'the Rules'). The matter traveled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Maxopp Investment was not available to the AO. In view of the same, considering the request of the parties on record we deem it appropriate to restore the issue back to the file of the AO with the direction to pass a speaking order considering the mandate of the Hon'ble High Court in Maxopp Investment. Needless to say that before passing of the order he shall give a reasonable opportunity to the assessee of being heard. The decision it is seen is fortified by the decision of the Delhi High Court in the case of assessee itself wherein their Lordships clarified their earlier order dated 02.02.2012 in ITA No.l293/Del/2011vide their order dated 17.04.2012 by stating that the necessary working and computation of the deduction u/s 14A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of computation of disallowance in terms of section 14A of the Act. The computation of disallowance of Rs. 74.26 lakhs by the Learned CIT(A) is as follows: A Total revenue Rs. 1132877.00 Lakhs B Common Expenses incurred relatable to both exempted and non-exempted income Rs. 83163.00 Lakhs C Exempted dividend income Rs. 10,11,59,945/- Disallowance = B XC A = 83163 lakhs X 1011.59945 lakhs 1132877 lakhs = Rs. 74.26 lakhs. 2.4 The details of common expenses amounting to 831.63 crores has been reproduced by the Ld. CIT(A) in para 4.3.3 of the impugned order. 2.5 Against the relief allowed by the Ld. CIT(A), the Revenue is in appeal before the Tribunal raising the grounds as reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es taxable entity under Oman tax laws. Flowever, the article 8(bis) exempts the taxation of dividend income of companies in Oman. In subsequent year also, the dividend income received from overseas joint venture OMIFCO Oman has been shown in the Income-tax return of PE in Oman, but no tax has actually been paid on the amount of such dividend in view of the exemption provided in accordance to the article 8 (bis) of the Income-tax Law in Oman. Effectively, dividend from OMIFCO, Oman is exempt in the hands of assessee in view of the DTAA agreement. It is admitted that the assessee is entitled to claim relief U/s 90 of the Income-tax Act, 1961 read with DTAA with Oman @ 30% on dividend income received by PE from OMIFCO-Oman. The net effect i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered for computation of the disallowance under section 14A of the Act. The predecessor of Ld. CIT(A) also considered his decision for assessment years 2008-09 and 2009-10 and directed the Assessing Officer to recompute the disallowance under section 14A of the Act by excluding the dividend income from OMIFCO-Oman. 4.2 Before us, the learned Counsel of the assessee has drawn our attention to the order of the Tribunal in the case of the assessee for assessment years 2008-09 in ITA No. 2394 and 3012/Del/2013, wherein the Tribunal has decided to exclude the investment in OMIFCO-Oman for the purpose of the computing disallowance in terms of Rule 8D(2)(iii) of the Rules. The relevant finding is reproduced as under: "5.7 It is the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e excluded while computing the disallowance under rule 14A viz. (1) investments on which no dividend income has been earned, (2) foreign investment in OMIFCO, Oman and (3) investments in cooperative societies. As far as the exclusion of investments on which no dividend income has been earned is concerned the issue is covered in favour of the assessee by the various judgments of the different Hon'ble High Courts as discussed aforesaid. As far as the issue of investment in OMIFCO, Oman is concerned, it is seen that the dividend received by the assessee from OMIFCO, Oman is chargeable to tax in India under the head "Income from other sources" and forms part of the total income. It is seen that the same is included in the taxable income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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