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2019 (5) TMI 25 - AT - Income TaxDisallowance u/s 14A by applying Rule 8D - assessee has suo moto disallowance u/s 14A - AO made an additional disallowance under normal provisions of the Act - assessee did not maintain separate books of account for accounting for expenses incurred in relation to income not includable in the total income - HELD THAT:- This Bench in assessee’s own case [2018 (6) TMI 360 - ITAT KOLKATA] held that comment of AO that the assessee did not to maintain separate books of accounts, for the expenses incurred in relation to earning of income not includible in the ‘total income’ would tantamount to AO being of the opinion that the assessee should maintain separate books for this purpose is not required as per law. AO has committed an error in assuming so. Hence this ground on which the AO has not accepted the suo motu disallowance made by the assessee u/s 14A is wrong. Thus, as the Assessing Officer has not recorded his satisfaction before rejecting the suo-moto disallowance made by the assessee u/s 14A of the Act, we delete this disallowance - Decided in favour of assessee. Disallowance of the provision made for leave encashment - HELD THAT:- This Bench of the Tribunal on identical facts for the Assessment Year 2011-12 in assessee’s own case [2018 (6) TMI 360 - ITAT KOLKATA] we set aside this issue to the file of the A.O to fresh adjudication in accordance with law. The Assessing Officer may either wait for the judgment of Hon’ble Supreme Court in the case of Exide Industries Ltd. [2007 (6) TMI 175 - CALCUTTA HIGH COURT] or may consider the alternative plea of the assessee that the claim be allowed on actual payment basis and if it is so done, the assessee would withdraw all the pending litigation, for all the years, wherein he sought deduction of the provision made for the leave encashment. Hence, this ground is allowed for statistical purposes. MAT - computation of book profits u/s 115JB - assessee’s case is that the provision has been made for leave encashment and gratuity on actuarial valuation and hence, the liability is an ascertaining liability and hence the liability has to be allowed - As regards bonus, it is argued that the assessee had paid bonus and hence it is an ascertained liability - HELD THAT:- This issue is to be set aside to the file of the Assessing Officer, to examine whether the provision, in question, has been computed on scientific basis by using actuarial valuation as claimed. If so, the proposition of law laid down by the Hon’ble Supreme Court in the case of Bharat Earth Movers vs. CIT [2000 (8) TMI 4 - SUPREME COURT] is to be applied by the Assessing Officer. As this aspect as to whether the provisions, in question, have been made by actuarial valuation has to be verified, we set aside Ground to the file of the Assessing Officer for fresh adjudication in accordance with law.
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