Dhanuka Laboratories Ltd Vs ACIT (ITAT Delhi)
Summary: The appeal concerned Assessment Year 2017-18 and arose from the order of the Commissioner of Income Tax (Appeal)-23, New Delhi. The Tribunal considered two substantive issues: a disallowance of Rs. 40,39,663/- under section 14A read with Rule 8D, and the tax treatment of Rs. 3,51,14,183/- received as a reward under the Merchandise Exports from India Scheme (MEIS). The assessee also challenged interest under sections 234B and 234C.
On the section 14A issue, the Tribunal noted that the investments were made in entities controlled by the assessee and that interest-free own funds exceeded the investments. Following the ratio stated in South Indian Bank Ltd. Vs. CIT, it deleted the disallowance under section 14A read with Rule 8D(2)(ii) and allowed Grounds 1.0 and 1.1.
On the MEIS claim, the assessee had originally offered the receipt to tax and raised the claim during appellate proceedings. The Department relied on Goetze (India) Ltd. Vs. CIT, while the Tribunal considered the Bombay High Court ruling in Commissioner of Income Tax, Central-1, Mumbai Vs. Pruthvi Brokers and Shareholders. Following the latter ratio, the Tribunal held that the additional claim could be entertained by the appellate authority notwithstanding its absence from the return or revised return.
