TaxTMI 
TaxTMI 
2017 (2) TMI 1422
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....s deduction though the same could be quantified based on reasonable estimate only. Reliance is placed on the decision of Jurisdictional ITAT Mumbai in TATA Communications Ltd. V JCIT (ITA 3062/Mum/2003 dated 05-12-2012) and other decisions. iii) The Ld. CIT (A) erred in confirming the disallowance u/s 14A computed as per rule 8D at Rs. 85.90 crore on a tax free income of Rs. 58.43 crore over looking fact that the appellant had himself quantified the disallowance at Rs. 7.94 crore being 05% of average investments earning tax free income. The CIT (A) should have appreciated as all the assets from which the tax free income has been earned are stock in trade as held in the case of CCI Ltd (250 CTR 291). iv) Without prejudice to the above contention, even if is to be applied, the disallowance can only be nil since the appellant does not hold any investment the income from which does not or shall not form part of total income arid the appellant only holds stock in trade. v) Without prejudice to the above contention, the question of disallowance of interest expenditure under rule 8D does not arise since the interest free funds held by the appellant far exceed th....
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.... number 4619 and 4873/M/2012 for assessment year 2008-09 has adjudicated identical issue as under; "Ground Nos.3.1 & 3.2 relate to the disallowance of provision towards liability arising on account of wage revision payable to employees. According to the assessee the provision made for excess payment of wages payable to the employees was towards the ascertained liability. It was submitted that after every five years, charges are revised as per the policy and agreement reached with the unions. Therefore, the wage revision for the year under consideration was must and certain. However, the negotiation was going on with the union and the agreement was signed with the union oil only. The Ld. CIT(A), however, rejected the claim oil ground that it was a contingent liability. He held that no agreement was signed by the assessee during the year under consideration, hence the assessee was not entitled to create provision for the wage revision. Being aggrieved, the assessee has come in appeal before us. The Ld. A.R. of the assessee, at the outset, has submitted that the issue is squarely coveted by the decision of the co-ordinate bench of the Tribunal in the case of "Tata Co....
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....herefore has disallowed 0.5% of investments u/s. 14A of the I.T. Act, 1961 of Rs. 7,94,39,436/-." 10. However the assessing officer was not convinced. He proceeded to make disallowance under section 14 A as per the provisions of rule 8D.. and made disallowance of Rs. 85,90,80,262. 11. Upon assessee's appeal learned CIT-A inter-alia noted that in the preceding assessment year learned CIT-A has, affirmed the disallowance. Referring to several case laws learned CIT-A affirmed the disallowance. Against above order assessee is in appeal before us. 12. We have heard both the counsel and perused the records. Ld. Counsel of the assessee submitted that the investments in this case held by the bank are actuality its stock in trade. Hence referring to several case laws he submitted that in such cases no disallowance under section 14 A is called for. 13. Up on careful consideration we find that this tribunal in assessee's own case for earlier assessment year (supra) has adjudicated identical issue as under; i) "Ground No.4 is relating to the disallowance under section 14A. The lower authorities have computed the disallowance under section 14A as per the provisions ....
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....ounts of the assessee. Sub section (2) does not ipso facto enable the Assessing Officer to apply the method prescribed by the rules straightaway without considering whether the claim made by the assessee in respect such expenditure is correct. The satisfaction of the Assessing Officer must be arrival at on an objective basis. In a situation where the accounts of the assessee furnish an objective basis for the Assessing Officer to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recourse to the method prescribed by the rules. An objective satisfaction contemplates a notice to the assessee, an opportunity to the assessee to place on record all the relevant facts including his accounts and recording of reasons by the Assessing Officer in the event that he comes to the conclusion that he is not satisfied with the claim of the assessee. iii) However, a perusal of the assessment order reveals that the AO has not followed the guidelines of objective satisfaction as laid down by the Hon'ble Bombay high Court in the case of Godrej & Boyce (supra) while making the disallowance. He without recording any reaso....
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....imilar except that learned counsel of the assessee has submitted that several more decisions have come which have upheld the view that disallowance under section 14 A is not required when the investment is held as stock in trade. In our considered opinion we should follow the doctrine of stare decisis. Accordingly following the same directions as above we remit this issue to the file of the assessing officer. Assessing officer is directed to consider the issue in light of the directions as above after giving the assessee adequate opportunity of being heard. Assessee is at liberty to canvas further case laws as it deems appropriate. 15. Apropos ground number (vi) of assessee's appeal. 16. On this issue Ld. Counsel of the assessee fairly agreed that this issue is covered against is the assessee by Tribunal decision in assessee's appeal. Hence this ground Stands dismissed. 17. Apropos ground number (vii) of assessee's appeal. 18. On this ground learned counsel of the assessee submitted that he doesn't have any cogent submission to make hence he did not substantiate the ground raised. 19. Upon hearing both the counsel and perusing the records we do not find any in....
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.... tax is payable or paid in the country of source, then country of residence is denied of the right to levy tax on such income or the said income cannot be included in return of income filed in India, would no longer apply after the insertion of provision of sub-section(3) of section 90 w.e.f 1st April, 2004, i.e., assessment year 2004-05. The said provision as conferred upon the Central Government a power to issue notification, assigning meaning to the terms used in the DTAA, which has neither been defined under the Act nor in the agreement provided that such a meaning should not be inconsistent with the provisions of the Act or agreement. In pursuance of such a statutory empowerment, Central Govt has issued a notification on 26n August, 2008, dearly specifying that where the DTAA entered into by the Central Govt with the Govt. of any other country provides that any income of a resident of India "may be taxed" in the other country, such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Income Tax Act, 1961 and relief shall be granted in accordance with the method for elimination of avoidance of double taxation provided ....
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....income that is to be included in the total income is such income of foreign branch that was taxed in that foreign country. The relief of tax will be allowed based on the tax paid in the foreign country. 22. Against the above decision of the Ld. CIT-A the grievance of revenue is that ITAT had held that income of all the foreign branches shall also be taxable in India and credit to taxes if any paid by the branches in the foreign country would be allowed. However, the Ld. CIT-A has held that only that income of foreign branches is to be included in the total income if the same was taxed in the foreign country. Ld. DR, has submitted that this is not at all as per the decision of the ITAT referred by the LD. CIT-A in his order. 23. Per contra Ld. Counsel of the assessee submitted that there is no infirmity in the direction of Ld. CIT-A and the same is accordance with CBDT notification no. 91/2008 dt. 28/08/2008. 24. We have carefully considered the submission and perused the record we find that the ITAT in the aforesaid decision has duly considered the said notification referred by the Ld. Counsel of the assessee. We may carefully refer to the contents of the said notification....