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TMI Blog2022 (1) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed as Revenue expenditure or not, is laid down by the Hon'ble High Court in assessee's own case for earlier assessment years and this depends on the facts of each case; that the issue was to be examined in the interest of Justice; that no prejudice would be caused to the Revenue in examining the matter once again; and therefore, the issue was set aside to the file of the learned Assessing Officer for considering the arguments of the assessee de novo in accordance with law. AR, in all fairness, submits that the same course as adopted for the assessment year 2008-09 may also be followed for this assessment year in restoring the issue to the file of the learned Assessing Officer for considering the facts and circumstances relevant for this particular assessment year and to take a call de novo. Ld. DR reports no objection for sending it back to the learned Assessing Officer. Recording the same, we allow this ground for statistical purpose, by restoring the issue to the file of the learned Assessing Officer to take a view de novo for this particular assessment year after hearing the assessee de novo in accordance with law. Addition u/s 14A r.w.r. 8D - HELD THAT:- AO a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shna, Advocate For the Respondents : Kipgen, CIT-DR ORDER Per K. Narasimha Chary, JM Challenging the order dated 13.04.2016 passed by the learned Commissioner of Income Tax (Appeals)- 10, New Delhi ( Ld. CIT(A) ), in the case of M/s. Krishak Bharati Co-operative Ltd. ( the assessee ), for the assessment year 2012-13, both the assessee and Revenue preferred these appeals. 2. Brief facts of the case as could be culled out from the record and the arguments are that, the assessee is a co-operative Society registered in India under the provisions of Multistate Co-operative Societies Act, 2002 under the administrative control of Department of Fertilizers, Ministry of Agriculture and Cooperation, Government of India with its principal business of manufacture of Fertilizers like Urea and Ammonia. 3. For the assessment year 2012-13 the assessee filed its return of income on 26.09.2012 showing loss of ₹ 62,47,36,376/-. Assessment under section 143(3) of the Income Tax Act, 1961 (for short the Act ) was however, completed by order dated 28.03.2016 with the additions by way of disallowance under section 14A of the Act read with Rule 8D of the Income Tax Rules 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at issue, as the things stand today the assessee is bound by the order of the Hon'ble Delhi High Court. 8. Assessee is, therefore, confining the challenge in respect of the land at Visakhapatnam into Tuticorin, which issue is quite different from the issue relating to the Noida land. On this aspect it is the submission of the Ld. AR that in assessee's own case for the assessment year 2008-09 in ITA numbers. 2304 and 2321/Del./2012, a Coordinate Bench of this Tribunal considered the same and after careful consideration thereof it was observed that the nature of lease, the location of the land, the terms and conditions of lease etc, for example, it is located in the Porto premises, the entry and exit of which is with Port Security, land used only for storage during transit etc., that the assessee has in its long time lease with Visakhapatnam Port trust is different from the terms and conditions of lease from Noida Authority; that the principle on the issue whether the rent in question is to be allowed as Revenue expenditure or not, is laid down by the Hon'ble High Court in assessee's own case for earlier assessment years and this depends on the facts of each case; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estments in two companies and reached the quantum of disallowance at ₹ 1,12,50,439/- which he upheld, by granting relief to the tune of ₹ 2,30,06,275/-. 13. Grievance of the assessee is two-fold. Firstly, that the learned Assessing Officer has not recorded any satisfaction to discard the assessee's explanation and to embark upon the determination of the disallowance by invoking section 14A of the Act read with Rule 8D of the Rules and secondly, that the learned Assessing Officer should not have disallowed any interest component under rule 8D(2)(ii) of the Rules inasmuch as the assessee has own funds and secondly that only tax-free income yielding investments alone should have considered under rule 8D(2)(iii) of the Rules. 14. Per contra, it is the submission on behalf of the Revenue that the learned Assessing Officer had elaborately considered the submissions made by the assessee vide paragraph numbers 3 to 10 of his order and more particularly he observed that inasmuch as the assessee claims to have incurred no expenditure at all to earn the exempt income, it is not necessary to pinpoint the expenditure, and he, therefore, while recording that the contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer proceeded to determine the quantum of disallowable expenditure straightaway in a mechanical manner. Learned Assessing Officer sought the explanation of the assessee along with the details on the applicability of the provisions under section 14A of the Act read with Rule 8D of the Rules, obtained the details and the explanation from the assessee, considered the same, elaborately discussed the investment and elaborate of the expenditure concerning them. At the end, learned Assessing Officer recorded that the contention of the assessee that no expense was incurred for earning the exempt income, cannot be accepted and, therefore, he proceeded to determine the proportionate expense attributable to the earning of the exempt income that should be disallowed in accordance with rules 8D(2)(ii) and 8D(2)(iii) of the Rules. It is, therefore, clear that the learned Assessing Officer advocated to the P L Account and the Balance Sheet of the assessee and not being satisfied with the claim of the assessee that no expenditure was incurred for earning the exempt income, he proceeded to determine the proportionate expenses attributable to the earning of the exempt income. We are, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 90 of the Act to delete the clarification issued by the Sultanate of Oman and the assessment made under the Omani laws. 21. For the sake of completeness, we deem it necessary to reproduce the relevant observations of the Hon'ble High Court, which read thus,- 27. As far as the submission of the revenue, that the assessee did not have a Permanent Establishment in Oman is concerned, this court is of opinion that admittedly, for about 5 years, i.e. 2002 to 2006, a common order was made under Article 26(2)(b) of the Income Tax Law of Oman. The opening para of this order reads as under: We refer to the returns of income and determine the taxable income as under: Kribhco Muscat is a permanent establishment supported by M/s. Krishak Bharati Cooperative Limited, a multi- state cooperative society registered in India. As per the accounts, Kribhco-Muscat is in receipt of dividend income from Omifco, a joint stock company registered in Oman, and that dividend income is connected with the investment of Kribhco-Muscat. The dividend income is, however, exempt from tax in accordance with Article 8 (bis) (1) of the Company Income Tax Law. The tax exemption on div ..... X X X X Extracts X X X X X X X X Extracts X X X X
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