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2015 (1) TMI 1444 - AT - Income TaxDisallowance u/s 14A - Non recoding of satisfaction - HELD THAT:- It is an undisputed fact that the assessee itself has offered 0.5% of dividend income on account of other expenses. It is also an undisputed fact that the AO has not pointed out any defect in the calculation made by the assessee nor AO has recorded any dissatisfaction with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income. Considering all these facts in the light of the provisions of Sec. 14A of the Act, we set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition. Ground No. 1 is accordingly allowed. Addition being securities transaction tax to the book profit computed u/s. 115JB - HELD THAT:- The said provision shows that it refers the amount of expenditure relatable to any income to which Sec. 10 other than the provisions contained in clause-38 thereof or section 11 or section 12 apply. In the case in hand the assessee has claimed exemption u/s. 10(38) of the Act therefore the assessee is covered by the exclusion provided in clause (f) to explanation-1 to Sec. 115JB of the Act. Therefore, we direct the AO to exclude addition being securities transaction tax from the book profit. Ground No. 3 is accordingly allowed. Addition wrongly accounted in the books of account of the assessee being charged to book profit u/s. 115JB - HELD THAT:- It is not in dispute that the assessee has made book entries of speculation gain which it has not actually earned during the year. Since the speculation gains were credited to the profit and loss account, it can be said that the profit and loss account are not prepared in accordance with part-II of Schedule- VI and for the purpose of Sec. 115JB. Every company has to prepare its accounts in the manner provided in part-II and Part-III of Schedule-VI to the Companies Act 1956. Since the assessee’s profit and loss account is not prepared in accordance with the relevant provisions of the Companies Act, the notional profit shown by the assessee has to be reduced while computing the book profit u/s. 115JB - See BOMBAY DIAMOND CO. LTD. MUMBAI [2009 (11) TMI 903 - ITAT MUMBAI] - we direct the AO to re-work the Book Profit by amount wrongly accounted in the books of account of the assessee - Decided in favour of assessee.
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