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2018 (4) TMI 47 - HC - Income TaxDisallowance in computing the book-profit u/s 115JB in respect of depreciation claimed on land after amortization of land by the assessee - whether computation of book profit was not as per Companies Act and wrongly claimed depreciation on land not allowable in Companies Act? - Held that:- Assessing Officer while computing the income under Section 115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115-J - Decided in favour of assessee. Addition in computing the book profit u/s 115JB as well as in normal income in respect of ‘provisions for loss in hedging transaction’ - Held that:- In the present case, the “loss” suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure under Section 37(1) - Decided in favour of assessee. Addition u/s 14A - addition in respect of indirect expenses incurred on administrative and other heads relating to the income to which section 10 applies - Held that:- The assessee’s business assets were about ₹ 26,930 crores of which ₹ 1014 crores were invested in its wholly owned subsidiaries. It is from the investment in its subsidiaries that the assessee earned ₹ 36.06 crores by way of dividend. However, it is important to note that the assessee had, free funds of its own of a sum of ₹ 17,275 crores available to it. As against the investment of ₹ 1014 crores which yielded dividend of ₹ 36.06 crores, the assessee had available to it ₹ 17,275 crores. As Mr. Ved Jain, the learned counsel appearing on behalf of the assessee, rightly submitted, the presumption is that the assessee used its own funds while making the investment of ₹ 1014 crores in the subsidiaries. There is nothing to rebut this presumption. The Tribunal, therefore, rightly held that there was no question of disallowance under section 14A.- Decided in favour of assessee.
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