Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 1694 - ITAT MUMBAIDisallowance u/s.14A r.w.r. 8D under normal provisions of the Act as well as in computation of book profits u/s.115JB - HELD THAT:- We find from perusal of the balance sheet as on 31/03/2010, total own funds available with the assessee is ₹ 295,23,58,270/-, whereas the investments made were only ₹ 131,21,08,283/-. Hence, the presumption that own funds is available with the assessee for making investments would apply even for the year under consideration we direct the ld. AO to delete the disallowance of interest made under second limb and rule 8D(2) of the rules. Disallowance of administrative expenses made under third limb of rule 8D(2) of the rules is concerned, we direct the ld. AO to make disallowance by considering only those investments that had yielded exempt income to the assessee. This direction is given in the light of decision in the case of Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI]. Accordingly, the altered ground raised by the assessee with regard to disallowance u/s.14A of the Act r.w.r. 8D(2) of the rules under normal provisions of the Act is partly allowed. Disallowance made u/s. 14A of the Act, while computing book profits u/s.115JB of the Act, we find that the computation mechanism provided in rule 8D(2) of the rules cannot be imputed into Clause (f) to Explanation 1 to Section 115JB (2) of the Act as held by the Special Bench of Delhi Tribunal in the case of Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI]. However, the ld. AO is directed to consider the disallowance of expenses incurred for the purpose of earning exempt income based on actual amounts debited to profit and loss account. This direction is also given in the light of the decision of Special Bench of Delhi Tribunal supra. Accordingly, the additional ground raised by the assessee is allowed for statistical purposes.
|