Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 915 - AT - Income TaxDisallowance u/s 14A r.w.s 8D - CIT(A) confirmed the order of the Assessing Officer - Held that:- Sec. 14A of the Act provides for disallowance of expenditure for earning the exempted income when the Assessing Officer is not satisfied that the expenditure was not claimed by the assessee. In the case before us, the assessee claims that surplus funds were used for making investments. The assessee also claims that no borrowed funds were used for making the investments. It is not the case of the assessee that no funds were borrowed for business purposes. When the assessee pays interest which is not attributable to any part of the income or receipt of the assessee, this Tribunal is of the considered opinion that second limb of Rule 8D would come into operation. Even in case no expenditure was incurred, third limb of Rule 8D provides for computation of expenditure. In the case before us, the Assessing Officer has applied the provisions of Rule 8D and computed the disallowance at ₹ 24,61,662/-. There is no dispute about the computation of expenditure as made by the Assessing Officer. Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. - Decided against assessee Reopening of assessment - no adjustment of bad and doubtful debts to the book profit u/s 115 JB - Held that:- The Assessing Officer found that a sum of ₹ 3.5 crores was not added to the book profit u/s 115 JB of the Act. In those circumstances, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment by issuing notice u/s 148 of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly, the same is confirmed. Explanation 1 to sec. 115JB of the Act was introduced by Finance Act 2008 with retrospective effect from 1.4.2001. Therefore, the book profit computed shall be increased by the provision made for meeting the liabilities. In this case, admittedly, the assessee has made a provision to the extent of ₹ 3,50,72,000/-. Though the assessee added the same in the normal computation, no adjustment was made as provided in Explanation 1 to sec. 115JB(2) of the Act. The only contention of the assessee before this Tribunal is that Explanation 1 to sec. 115JB(2) is not applicable during the year under consideration. No doubt, Explanation 1 to sec. 115JB(2) of the Act was introduced b Finance Act 2008 with retrospective effect from 1.4.2001. Therefore, it is very much applicable for the year under consideration. There may be a reasonable cause on the part of the assessee for not making adjustment on the date of filing the return of income. It does not mean that the provision made for bad and doubtful debt cannot be added back to the book profit as provided in Explanation 1 to sec. 115JB(2) of the Act. This Tribunal is of the considered opinion that since Explanation 1 to sec. 115JB(2) of the Act is applicable retrospectively with effect from 1.4.2001, the provision for bad and doubtful debt has to be increased as provided therein. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority. - Decided against assessee Rectification proceedings u/s 154 - excess loss was set off against the book profit - Held that:- It is not in dispute that the total book loss available to the assessee-company for carry forward and set off for assessment year 2004-05 is only ₹ 3,57,07,000/- and not ₹ 4,31,68,928/-. The Assessing Officer has rectified only this apparent mistake on record. Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.- Decided against assessee
|