Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 458 - AT - Income TaxMAT applicability - whether the provisions of section 115JB of the Act are applicable to the assessee being a Corporation established under Damodar Valley Corporation Act, 1948 for the Asst Years 2008- 09 and 2009-10 - Held that:- As we hold that in view of the legislative change brought about by the introduction of Explanation 3 in section 115JB of the Act by the Finance Act, 2012 , the assessee’s contention in fact stands more fortified. The Explanation 3 to section 115JB makes it evidently clear that section 115JB is applicable only to entities registered and recognized to be companies under the Companies Act, 1956. Since the assessee is not a company within the meaning of Companies Act, 1956 , section 211(2) and proviso thereon is not applicable and therefore consequently we hold that the provisions of section 115JB of the Act are also not applicable. Disallowance u/s 14A - Held that:- AO had adopted the disallowance figure u/s 14A of the Act at ₹ 20,03,61,170/- under normal provisions of the Act and at ₹ 41,16,36,422/- under the provisions of section 115JB of the Act. There seems to be apparent mistake on adoption of figures by the Learned AO while computing the book profits u/s 115JB of the Act. However, we have already held that the assessee corporation is not liable to pay tax on the book profits u/s 115JB of the Act and accordingly, the issue of whether the disallowance u/s 14A of the Act could be added to the book profits u/s 115JB of the Act, becomes infructuous. Accordingly the ground raised by the assessee in this regard is allowed. Applicability of rule 8D - Held that:- As the action of the Learned AO in directly embarking on Rule 8D(2) of the Rules without recording any satisfaction as mandated in Rule 8D(1) of the Rules is not appreciated and hence no disallowance u/s 14A of the Act by applying Rule 8D(2) of the Rules could be made in the facts of the instant case. In the instant case the assessee corporation had disallowed a sum of ₹ 11,08,315/- and no adverse inference has been brought on record and no satisfaction has been recorded with cogent reasons by the Learned AO as to why the said figure computed by the assessee is incorrect. Without satisfying the requirement contemplated in Rule 8D(1) , the Learned AO had directly proceeded to apply Rule 8D(2) in the instant case. Hence the disallowance u/s 14A of the Act cannot be made in the instant case of the assessee corporation for the Asst Years 2008-09 and 2009-10. Interest u/s 234C - Held that:- As per Circular: No. 676, dated 14-1-1994 and section 10 of General Clauses Act, we hold that the assessee had not committed any default in payment of first instalment of advance tax and hence we direct the Learned AO not to charge interest u/s 234C in the instant case for the first quarter.
|