AIR INDIA LTD,MUMBAI vs. DCIT 5(1), MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order dated 12.12.2014 of CIT(A)-10 Mumbai the assessee has filed the present appeal.Assessee-company, engaged in the business of air transportation of passengers and cargo,filed its return of income on 29.10.2005, declaring total income at Rs.Nil.The Assessing Officer(AO)completed assessment u/s. 143(3) of the Act on 26/12/2007 determin - ing its income at Rs.44 . 33 crores,wherein, interest disallowance,u/s. 14A of the Act,was made at Rs.12.83lakhs. Matter travelled upto the Tribunal and issue was set aside to the file of AO to decide the issue afresh.He completed assessment on 30.03.2013 u/s.143(3) r.w.s. 254 of the Act,determining the income of the assessee at Rs.33.19 crores.

2.Effective Ground of appeal is about disallowance made u/s. 14A of the Act, for the investment made in shares of Cochin International Airport Ltd. (CIAL). It was brought to our notice that identical issue was deliberated upon and decided by the Tribunal for AY. 2007 -08 on 01.01.2016 (ITA/5204/Mum/2011). We are reproducing paragraphs 2.1 to 2.3 of the said order and same read as under: “2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a public sector corporation wholly owned by Government of India and is a national carrier, engaged in national/international air transportation of passengers and cargo. The assessee in its revised return declared loss of Rs.660,50,85,118/-. The assessee showed dividend income, during Financial Year 2006-07, amounting to Rs.3,06,00,000/- and out of which dividend income of Rs.2,56,00,000/- was offered as taxable as income from other sources as the same was received from foreign investment. The balance amount of Rs.50 lakhs was received from Cochin International Airport Ltd. (in short CIAL) and was claimed as exempt u/s 10(34) of the Act on the ground that CIAL is an Indian company in which Air India holds equity shares. The ld. Assessing Officer asked the assessee as to why the expenses should not be disallowed by applying rule-8D of the Income Tax Rules. The assessee vide communication dated 30/12/2009 read as under:-

1767/M/15-Air India