9911796707
TMI Blog2022 (3) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... d by assessee against order dated 28.02.2014 passed by Additional CIT, Range-23, New Delhi (hereinafter referred to as the Ld. AO) u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was partly allowed. 2. The facts in brief are assessee is a Multi-State Cooperative Society engaged in the manufacturing of chemical fertilizers through its seven operating units at different locations . A return declaring income of Rs. 723,16,22,035/- was filed on 13.10.2010 which was revised later on 14.01.2011 showing income of Rs. 5,77,15,94,117/-. Revised return filed by the assessee was processed u/s 143(1) and thereafter case was selected for scrutiny. Statutory notice u/s 143(2)/ 141(1) of the Act were issued which was complie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of that resident an amount equal to the income tax paid in the Sultanate of Oman, whether directly or by deduction which shall not exceed that part of the income tax, computed before the deduction is given, which is attributable to the income which may be taxed in the Sultanate of Oman. In view of these provisions, it was held by the Ld. AO that assessee is eligible for credit of taxes paid or payable in Oman in terms of Article 25(2) and 25(4) of the DTAA. 2.4 Thus in respect of dividend income from Joint venture with OMIFCO, Oman, it was held by the Ld. AO that assessee has not paid tax either in the source country or in India. It was further noted by the Ld. AO that as per the Oman tax laws, any PE (Permanent Establishment) in Oman w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and is subjected to tax under Indian Tax Laws, by necessary implication the same cannot be considered for disallowance u/s. 14A as the said section only covers the investments, the income from which does not form part of the Total Income (i.e. they do not enter enter the computation of Total Income at all u/s. 10 to 13A). It is an incontrovertible fact that neither Dividend from Foreign Companies nor Business Income of the PE is eligible from' exclusion from Total Income or exempt from taxes under section 10 to 13A. The relief from Double Taxation which is taken by means of a Tax credit u/s. 90(2) read with Article 25(2) & (4) of the DTAA with Oman cannot alter the nature of income from taxable to exempt (and thus come under the sweep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "1. Whether the Ld. CIT(A), on the facts and in the circumstances of the case, has erred in deleting the disallowance of an amount of Rs. 2865.43 lac made by the Assessing Officer u/s 14- A read with Rule 8-D(2)(ii), as the assessee has claimed deduction of expenses in relation to income which is exempt from tax." "2. Whether the Ld. CIT(A), on law also, has erred in deleting the disallowance of an amount of Rs. 2865.43 lac made by the Assessing Officer u/s 14-A read with Rule 8-D(2)(ii), as the assessee has claimed deduction of expenses in relation to income which is exempt from tax." "3. Whether the Ld.CIT(A), on the facts and in the circumstances of the case, has erred in deleting the addition of Rs. 60,70,000/- made by the AO on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 and order dated 30.11.2016 read along with order dated 05.04.2018 passed by Delhi Bench of the Tribunal in assessee's own case for assessment year 2008-09 in ITA No. 2394 and 3012/Del/2013. It was also submitted that assessee has on its own made disallowance equivalent to exempt dividend income. 8. In regard to ground no. 3 and 4 it was submitted that Horticulture expenses were made around plant and township maintained by the assessee and they are allowable u/s 37(1) of the Act and there is no element of "personal expense" in the hands of assessee company. Reliance was placed on the judgment of Hon'ble Delhi High Court in Gujarat Nargian Ltd. vs. DCIT citation 67 SOT 325 (Delhi) and GAIL India Ltd. vs. DCIT ITA No. 4454/Del/2013 (Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on record any specific finding that element of personal nature is involved in these expenses 10.1 Also the assessee is engaged in the manufacturing of chemical fertilizers and certainly the premises of the assessee require maintenance of extensive green channels and green belts for balancing environmental hazards which are quite probable, due to the nature of activities of the assessee company. The ld. F.A.A has taken into consideration the requirements laid by Central Pollution Control board and Environment Protection Laws to justify the expenses. 10.2 Lastly there is no prudence in expecting the assessee to maintain log book for employee wise / premise wise expenditure, as expenditure was for maintenance of the green belts in the tow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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