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TMI Blog2022 (10) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5, computed in the manner laid down in the Act. Therefore, Section 14A pertains to disallowance of deduction in respect of income which does not form part of the total income. Since 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, the same is included in taxable income in the computation of income filed by the assessee. However, rebate of tax has been allowed to the assessee from the total taxes in terms of Section 90(2) of the Income Tax Act read with Article 25 of the Indo Oman, DTAA and thus, the dividend earned can be said to be in the nature of excluded income and, therefore, the provisions of Section 14A would not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll purposes is exempted from tax. He further states that the ITAT has erred in restricting the disallowance to the tune of Rs.74.26 lakhs as against Rs.9.10 Crore, disallowance made by the Assessing Officer under Section 14A read with Rule 8D of the Act after excluding the investment in OMIFCO-Oman. 3. This Court is of the opinion that in view of Section 14A(1), no deduction is to be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. As per Section 2(45) of the Act, total income means the total amount of income referred to in Section 5, computed in the manner laid down in the Act. Therefore, Section 14A pertains to disallowance of deduction in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words do not form part of the total income under this Act is significant and important. As noticed above, before allowing deduction under Chapter VI-A we have to compute the income and include the same in the total income. In this manner, the income which qualifies for deductions under Sections 80C to 80U has to be first included in the total income of the assessee. It, therefore, becomes part of the income, which is subjected to tax. Thereafter, deduction is to be allowed in accordance with and subject to the fulfillment of the conditions of the respective provisions. This is also subject to Section 80AB and 80A(1) and (2). Chapter VI-A does not postulate or state that the incomes which qualify for the said deduction will be excluded a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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