2013 (5) TMI 116 - ITAT MUMBAI

Disallowance u/s 14A r.w.r. 8D - Held that:- In the light of the decision of Godrej Boyce Vs DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) set aside the orders of the authorities below and hold that no disallowance u/s. 14A shall be made by applying the method provided u/R 8D of the I.T Rules, in the present assessment year which is prior to A.Y. 2008-09 and the disallowance has to be worked out by the AO on some ‘reasonable basis’ and not Rule 8D - restore the matter to the file of the AO for deciding the quantum of disallowance.

Addition of disallowance u/s 14A to the book profit computed u/s 115JB - Held that:- As decided in Goetze (India) Ltd. v. CIT [2009 (5) TMI 615 - ITAT DELHI] the amount disallowed u/s 14A cannot be added to the amount of book profit u/s 115JB. Unless a particular expenditure is debited to the profit and loss account relating to the earning of exempt income, the same cannot be imported into the computation of book profit as clause (f) of Explanation 1 to section 115JB which only refers to the amount debited to the profit and loss account - in favour of the assessee.