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2013 (5) TMI 473 - AT - Income TaxMAT - Adjustment on account of the expenditure incurred for exempt income for the purpose of computation of book profit u/s 115JB - disallowance of exemption u/s 10(23G) and 10(34) for interest income as well as dividend income - Held that:- Though the authorities below have not given a finding that the assessee has incurred any expenditure exclusively for earning of the exempt income in the shape of interest and dividend, however, section 14A has an implicit principle of apportionment in the cases where the expenditure is incurred for composite/indivisible activity, in which taxation and non taxable income is received, therefore, following the order of M/s Godrej Agrovet Ltd [2010 (9) TMI 291 - ITAT, MUMBAI] AO directed to restrict the disallowance on account of administrative expenditure u/s 14A to 2% of the total exempt income. As regards the addition of the amount of disallowance, as computed u/s 14A while computing the book profit u/s 115JB is concerned, this Tribunal in the case of Goetze (India) Ltd (2009 (5) TMI 615 - ITAT DELHI ) has held that for computation of adjusted book profit, the provisions of sec.14A cannot be imported into clause (f) of the Explanation to sec. 115JB. Also see case M/s Bengal Finance & Investments P Ltd (2013 (5) TMI 117 - ITAT MUMBAI) where it is clear that the amount disallowed u/s 14A cannot be considered while computing the book profit u/s 115JB of the Act. appeal of assessee partly allowed.
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