TaxTMI 
TaxTMI 
2010 (6) TMI 17
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....2 declaring an income of Rs.2620.22 Crores. In the computation of taxable income, the income from other sources was disclosed to comprise of a dividend income of Rs.206.95 Crores. During the course of the assessment proceedings, the Assessing Officer issued a notice to the assessee on 11 October 2004 seeking inter alia details of dividend claimed to be exempt under Section 10(33) without considering the disallowance under Section 14A. In its reply dated 17 January 2005 the assessee disclosed that during the previous year relevant to Assessment Year 2002-03 it had received a dividend income of Rs. 206.95 Crores. The assessee stated that investments were made out of internal accruals and no borrowings were made for the purpose of investment. ....
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....all not be allowed as deduction under the Act. No expenditure had been allocated by the assessee company towards earning of the said exempt income. Hence, appropriate disallowance on account of allocable administrative expenditure was required to be made u/s 14A of the Act, which remained to be done. Considering the facts of the case, nature of income not forming part of the total income, the expenses incurred and position of law, the appropriate disallowance @ 2% of the total administrative cost amounts to Rs.3,170.95 lakhs. 2. By not allocating any expenditure towards earning of dividend income and by claiming that whole of the expenditure incurred during the year was incurred for earning of the taxable income offered in the return fil....
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....cer to assess or reassess income involving matters which are the subject matter of the appeal. Fourthly, the Assessing Officer in response to an audit objection had stated that he had correctly allowed the deduction. Consequently, recourse to the provisions of Sections 147 and 148 was not warranted. 6. On the other hand, it was urged on behalf of the Revenue that it is a settled principle of law that each Assessment Year constitutes an independent source of assessment and that consequently, the Assessing Officer was not bound by the view which was taken during Assessment Years 2000-01 and 2001-02. 7. From the record before the Court it is evident that during the course of the assessment proceedings for Assessment Year 2002-03 the asse....
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....ove, it is submitted that there is no nexus between dividend earned and any expenditure incurred. Therefore, it is submitted that no expenditure should be netted off against the above dividend income. In this connection, reliance is placed on the decision of Bombay High Court in the case of CIT v. General Insurance Corporation of India 254 ITR 203 (Bom.). Further, reference is made to the assessment made under Section 143(3) for the assessment year 2001-2002 where the assessing officer had accepted the fact that no expenditure was incurred for earning tax free dividend income." 8. The record therefore clearly shows that the assessee disclosed fully and truly all the material facts necessary for the assessment insofar as it had a beari....
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....an order dated 22 March 2007 passed under Section 263 inter alia called upon the Assessing Officer to consider the disallowance under Section 14A of administrative expenses attributable to dividend income claimed as exempt under Section 10(33). The Assessing Officer did not pass an order giving effect to the directions of the Commissioner. Against the order passed by the Commissioner under Section 263 the assessee had filed an appeal before the Tribunal. The assessee sought liberty before the Tribunal to withdraw the appeal with permission to revive the appeal in the event that the Assessing Officer passed an order in compliance with the directions of the Commissioner under Section 263. Since the Assessing Officer had not passed an order gi....