Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 2003 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Addition while arriving at book profit u/s 115JB - HELD THAT:- In Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] the Special Bench of the ITAT, Delhi has held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D and only those investments are to be considered for computing average value of investments which yielded exempt income during the year. Facts being identical, we follow the above decision and direct the AO to delete the addition made by him u/s 14A while calculating book profit u/s 115JB. Disallowance u/s 14A in the normal computation of income - On a perusal of the balance sheet of the appellant as at 31st March 2011, we find that it had its own funds of ₹ 1,63,968.62 lacs which exceed total investment of ₹ 1,29,088.44 lacs. Relying on HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] the Hon'ble Bombay High Court referring to the decision in CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] 366 ITR 505 (Bom) and CIT v. Reliance Utilities & Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] we direct the AO to delete the disallowance made by him under Rule 8D(2)(ii). Disallowance u/s 8D(2)(iii) in the normal computation of income - In Godrej & Boyce Manufacturing Company Ltd. v. DCIT [2017 (5) TMI 403 - SUPREME COURT], it is held that the literal meaning of Section 14A, far from giving rise to any absurdity, appears to be wholly consistent with the scheme of the Act and the object/purpose of levy of tax on income. We confirm the disallowance of ₹ 490.91 lacs made by the AO under Rule 8D(2)(iii) in normal computation of income. To sum up Disallowance made by the AO while arriving at book profit u/s 115JB is deleted, disallowance made by the AO in normal computation u/s 8D(2)(ii) is deleted and disallowance made by the AO in normal computation under Rule 8D(2)(iii) is confirmed. Assessee appeal is partly allowed.
|