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2016 (2) TMI 1305 - AT - Income TaxDisallowance u/s 14A r.w.r.8D - whether disallowance u/s 14A can exceed exempt income or not? - HELD THAT:- Hon’ble Delhi High Court in the case of Joint Investment Pvt. Ltd [2015 (3) TMI 155 - DELHI HIGH COURT] has held that disallowance u/s 14A rwr Rule 8D cannot exceed the entire tax exempt income. Respectfully following the decision of Hon’ble Delhi High Court the disallowance is required to be restricted to ₹ 1,65,492/- only. However, as the assessee on its own has made disallowance in the return of income, we restrict the disallowance as made by the assessee own its own. In view of this ground No.1 of the appeal is allowed reversing the order of the learned Commissioner of Income-tax (Appeals) and disallowance of ₹ 16,24,198/- is directed to be deleted. The appeal of the assessee is partly allowed. Disallowance of Provident Fund - assessee has deposited employer’s contribution to the Provident Fund towards where the PF trust has made investments which are not permitted. AO did not considered this trust as recognized Provident Funds under Income Tax Act - HELD THAT:- This issue is taken up by the assessee before the learned Commissioner of Income-tax (Appeals) who in turn deleted the addition stating that since the trust is already registered and learned Commissioner of Income-tax has not revoked the registration of the trust , AO is not empowered to treat it as unrecognized fund. Further CIT (A) has also recorded finding that the matter is already decided in favour of the appellant by the orders of coordinate bench for Assessment Year 2003-04 to 2007-08 dealing identical issue in favour of the assessee and the appeal of the revenue is also dismissed by Hon’ble Delhi High Court. In para 5.4 of the order of ld CIT(A) he has dealt this disallowance. Ld. DR could not point out any infirmity in the same and therefore we confirm the order of CIT (A) in deleting the disallowance on account of employers’ fund contribution made by the assessee to the recognized fund. ground No.1 of the appeal of the revenue is dismissed. Disallowance as prior period expenses - assessee while computed the income under normal computation mechanism has added this, However it was not added while calculating the book profit tax u/s 115JB - HELD THAT:- Commissioner of Income-tax (Appeals) has dealt with this issue vide para No.5.6 of his order and he followed decision of Hon’ble Delhi High Court in the case of Khaitan Chemical and Fertilizers [2008 (9) TMI 89 - DELHI HIGH COURT] where in the addition is deleted holding that there is no such adjustment required to be done according to the provision of section 115JB on account of prior period expenditure. We do not find any infirmity in the order of ld CIT(A), none has been pointed out by the ld DR. In view of this we confirm the order of LD CIT (A) in deleting the addition of prior period expenditure while computing book profit tax u/s 115JB of the Act.
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