TaxTMI 
TaxTMI 
2026 (6) TMI 967
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....s compared to the total income of Rs. 63,47,95,820 computed by the Appellant in the revised return of income for the said assessment year. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in partly upholding the additions made by the Assessing Officer in the assessment order passed under section 143(3) of the Act. 3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the disallowance made under section 14A read with Rule 8D of the Income-tax Rules, 1962, without appreciating that the Appellant had already made a reasonable suo motu disallowance under section 14A read with Rule 8D, considering those investments which actually yielded exempt income during the year under consideration. 4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Assessing Officer in including non-current investments in the subsidiary company, from which no exempt income was earned during the year, while computing the average value of investments under Rule 8D(2)(ii) and Rule 8D(2)(iii). 5) On the facts and in the circumstances of....
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.... relating to disallowance made under section 14A r/w Rule 8D of the Income-tax Rules, 1962 (the Rules) for expenditure attributable to earning of exempt income, relevant facts are that assessee had earned dividend income of Rs. 3,26,46,424/-from mutual funds, claimed exempt under section 10(35). Assessee had suo-moto disallowed expenditure of Rs. 30,17,484/- computing it as per the provisions of Rule 8D. Assessee while computing this suo-moto disallowance, considered average value of only those which yielded exempt income. This methodology was adopted in view of decision of the Hon'ble Special Bench of ITAT, Delhi in the case of ACIT v. Vireet Investment (P) Ltd. [2017] 82 taxmann.com 415 (Del.) (SB). Hon'ble Special Bench had held that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. Contrary to this, ld. AO observed and held that non-current investment of Rs. 38,79,13,031/- made by the assessee in its subsidiary company Webtech Labels Private Limited ought to have been included while computing the disallowance under Rule 8D. On this, assessee's contention is that no dividend income was earned from t....
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....idy granted at the rate of 15% of fixed capital investment made by the assessee subject to a maximum ceiling of Rs. 30,00,000/-. Ld. AO treated the said subsidy as a revenue receipt by observing that the said subsidy was granted for generating employment and therefore, is to compensate employment cost debited in the profit and loss account. 5.1. Contention of the assessee in this regard is that the scheme under which assessee has been granted capital investment subsidy was announced with a view to accelerate industrial development in the concerned state. Reference was also made to CBDT Circular no. 7/2003 dated 05.09.2003 which acknowledged the fact that the Union Cabinet has announced a package of physical and non-physical concessions for the special category states of Himachal Pradesh, Uttarakhand, Sikkim and North-eastern states in order to give boost to the economy in these states. From the said CBDT Circular, reference is made to para 3.1(II) which mentions about eligibility for capital investment subsidy at the rate of 15% of investment made in plant and machinery subject to ceiling of Rs. 30,00,000/-. Even the existing units are entitled to the said subsidy for their subs....
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....thin the definition of income subject to the exclusions carved out in Explanation 10 to section 43(1) and for grants given towards corpus of trust/institutions. He supported the view taken by the authorities below to uphold the addition so made. 7. We have heard both the parties and perused the material on record. Case before us is prior to the amendment brought in by the Finance Act, 2015. In the present case, the pre-amendment jurisprudence continues to apply whereby the settled position in law is that the nature of a subsidy whether capital or revenue is to be determined by applying the 'purpose test'. If the object of subsidy is to support the setting up of a new unit or acquisition of a capital asset, it has been held to be capital in nature and consequently not taxable. Conversely, if the subsidy is granted to meet day to day operations, reimbursement, recurring expenses or make business activities profitable, it has been held as revenue in nature and thus, subjected to tax. 7.1. Reference is made to the decision of Hon'ble Supreme Court in the case of CIT v. Chaphalkar Brothers [2017] 87 taxmann.com 178 (SC). In this judgment, Hon'ble Court referred to various judicial....
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.... vide letter dated 11.02.2026 in respect of refund of access Dividend Distribution Tax (DDT) paid by it which is to be restricted to tax rate of 10% under Article 10(2) of the India-Netherlands Double Tax Avoidance Agreement (DTAA). The additional grounds so raised by assessee are reproduced below: "9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not admitting and adjudicating the additional ground raised by the Appellant seeking restriction of Dividend Distribution Tax ("DDT") under section 115-0 of the Act, to the rate prescribed under Article 10(2) of the India-Netherlands DTAA. 10. In doing so, the Ld. CIT(A): (a) erred in not appreciating that the dividend paid by the Appellant to Huhtavefa B.V., a tax resident of the Netherlands, is governed by Article 10(2) of the India-Netherlands DTAA, which restricts India's taxing rights on such dividends to 10% of the gross amount of dividends (b) failed to appreciate that DDT is, in substance, a tax on the dividend income of the non-resident shareholder, merely collected from the distributing company for administrative convenience, and therefore falls with....