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2016 (9) TMI 916 - AT - Income TaxAddition u/s 68 - Held that:- The entire details of the share applicants were duly produced by the assessee and were also confirmed by them before the ld AO in response to notices issued u/s 133(6) of the Act and extensive verification of those details were also carried out by the ld AO during the course of scrutiny assessment proceedings completed for Asst Year 2011-12. We find that none of the documentary evidences filed by the assessee or by the share applicants were treated by the ld AO as ingenuine or the applicants were non-creditworthy. We do not deem it fit and appropriate to get into any case laws on the impugned subject as the facts are staring on us wherein the extensive verifications were duly carried out by the ld AO and no adverse inferences were drawn by him. Disallowance u/s 14A - Held that:- The instant case as the assessee had duly proved that the investments in the earlier year were made out of own funds and not out of borrowed funds. Hence we find that the ld CITA had rightly deleted the disallowance made by invoking Rule 8D(2)(ii) of the Rules. MAT computation - Whether the disallowance made u/s 14A of the Act could also be imputed in the computation of book profits u/s 115JB? - Held that:- Unless an item is debited in the profit and loss account, the same cannot be the subject matter of addition to book profits under clause (f) of Explanation to section 115JB of the Act. Section 115JB of the Act is a deeming provision and its provisions are to be strictly construed. The scope of clause (f) cannot be enlarged to bring within its ambit the provisions of section 14A(2) and 14A(3) of the Act thereby also encompassing the provisions of Rule 8D by which disallowance is made on subjective application of a mathematical formula contained in the Rule. The disallowance made u/s 14A of the Act read with Rule 8D is only artificial disallowance and obviously the same is not debited in the profit and loss account and the same cannot be imported into clause (f) of Explanation to Section 115JB of the Act.
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