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2015 (5) TMI 823 - HC - Income TaxDisallowance u/s 14A - Tribunal setting aside and restoring back the issue to the file of the AO for denovo adjudication by relying on the judgment of M/s. Godrej & Boyce Mfg. Co. Ltd [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Held that:- The tribunal directed that the matter is required to be reconsidered by the assessing officer. He shall examine the relevant accounts, the nature of term loans and availability of interest free funds with the assessee. After examining all these details and account, and only if some reasonable disallowance can be adopted that should be worked out and in relation to earning of the dividend. The asssesee was also directed to furnish necessary details and working before the assessing officer. Addition u/s.14A r.w. Explanation 1 of section 115JB deleted by ITAT FOR the purpose of computing book profit u/s.115JB - Held that:- Once the accounts are prepared in accordance with Indian Companies Act, 1956, they have been approved by the Registrar of Companies, then, the assessing officer must take those accounts into consideration. If the assessee has not debited any actual expenditure relating to the earning of the exempt income, therefore, the provisions of section 14A cannot be imported into the computation of book profit under section 115JB of the Income Tax Act, 1961. Therefore, even clause (f) of Explanation to section 115JB which refers to those amounts which are debited to the Profit and Loss account, alone can be added to the book profit, cannot apply . Having held that the matter is sent back to the assessing officer for reconsideration and while working out the deduction in terms of section 14A read with Rule-8D, the asssessing officer must take note of clause (f) of Explanation to section 115JB of the I.T. Act, then we do not think that questions 1 and 3 could be entertained. The same clarification as is given in the case of M/s. Essar Teleholdings Ltd. [2015 (5) TMI 810 - BOMBAY HIGH COURT]would govern the present case. The facts and circumstances being identical, we do not think that the appeal should be entertained on question nos.1 and 3 above - Decided against revenue. Interest under section 234B - Held that:- The liability to pay interest would only arise on default and is really in the nature of a quasi punishment. The liability to tax although credited retrospectively could not entail the punishment of payment of interest with retrospective effect.We do not think that the assessee before us can be called upon to pay interest in terms of section 234B, once the explanation was introduced or brought in with retrospective effect but by Finance Act, 2008. Then, there was no liability to pay interest in terms of this provision. That was because the assessee cannot be termed as defaulter in payment of advance tax. The advance tax computation on the basis of the unamended provision therefore could not have been entertained.- Decided against revenue.
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