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2012 (8) TMI 555 - AT - Income TaxDis-allowance of amount transferred to Statutory Reserve and amount transferred to Reserve Fund while computing normal provisions and also while computing the book profits u/s 115JB - Held that:- Tribunal in assessment of earlier year held that the amount involved is only an appropriation out of company's own profits, which have not yet been specified, before declaration of dividend. The amount has very much reached and is in the business of the assessee. No obligation is attached and even if some obligation is subsequently attached for specific appropriation of the fund, it will only be an application of income. It cannot be said that there was any diversion of income by overriding title nor can the amount set apart be claimed as expenditure and it also cannot be stated that it was a loss. Dis-allowance both under regular computation and while computing the book profit u/s 115JB is upheld - Decided against assessee Dis-allowance u/s 14A under the normal provisions as well as while computing book profit u/s 115JB - Held that:- It is a condition precedent for the AO while determining amount of expenditure incurred in relation to exempt income to record his dissatisfaction with the correctness of the claim of the assessee in respect of the expenditure incurred in relation to exempt income. See Maxopp Investment Ltd (2011 (11) TMI 267 - DELHI HIGH COURT ). In present case, AO has not given any finding as to how the calculation was made by the assessee and disallowing the same in its computation of income towards expenditure incurred in relation to income, which does not form part of total income is incorrect. Therefore, we delete the dis-allowance made u/s 14A while computing income both under normal provisions as well as under the provisions of section 115JB - Decided in favor of assessee
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