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2016 (12) TMI 122 - HC - Income TaxDisallowance u/s 14A - mat computation - Held that:- Admittedly, for the purpose of Section 115JB, the book profits assessed by the assessee were accepted and the assessee was brought to tax accordingly. The CIT (Appeals), therefore, wrongly observed that the issue which required consideration is whether the provisions of Section 14A are applicable for determining the book profits under Section 115JB. In view of what we have just said this issue does not arise. The last but one sentence in paragraph 3.3 quoted above would cause difficulties in future. The CIT (Appeals) observed that the disallowance under Section 14A read with Rule 8D for computing book profit under Section 115JB was deleted. While it is possible to restrict this observation for the purpose of Section 115JB alone, it is also possible that in future the same confusion may arise on account of the assessee contending that the disallowance under Section 14A was set aside. The Tribunal has gone a step further in observing that the issue of disallowance under Section 14A was academic. It is not. As we mentioned earlier, it is necessary that the disallowance under Section 14A is also computed for it may have an effect in the future years on account of the benefit accorded to an assessee under Section 115JAA. In these circumstances, the impugned order and judgement is set aside. The matter is remanded to the Tribunal for determining all the issues raised by the assessee especially the issue of disallowance under Section 14A. Needless to clarify that all the contentions of the parties including as to the applicability of Rule 8D are kept open.
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