Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 747 - AT - Income TaxAddition u/s 14A r.w.r. 8D - suo-moto disallowance made by the assessee - computing the income under normal computation as well as MAT computation under section 115JB - HELD THAT:- As own fund of the assessee exceeds the investment. Therefore in our considered view there cannot be any disallowance of interest expenses. See GUJARAT STATE FERTILIZERS & CHEMICALS LTD. [2013 (7) TMI 701 - GUJARAT HIGH COURT] We further hold that the disallowances on account of interest expenses in the case on hand cannot be made in view of the fact that the own fund of the assessee exceeds the impugned investments. As already held that there cannot be made any disallowance of any interest as well as administrative expenses in the given facts and circumstances due to the fact that the AO has not pointed out any defect in the disallowances made by the assessee as well as no satisfaction was recorded as mandated under section 14A r.w.r. 8D of Income Tax Rules. Addition in the book profit under section 115JB - HELD THAT:- Disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction of the Hon'ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. . [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] Disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently - HELD THAT:- ad-hoc disallowance will serve the justice to the Revenue and assessee to avoid the multiplicity of the proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance of 1% of the exempted income as discussed above under clause (f) to Explanation-1 of Sec. 115JB of the Act. We also feel to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we note that there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently. Therefore our action for restoring back the issue to the file of AO would unnecessarily cause further litigation. Thus we limit the disallowance on an ad-hoc basis @ 1 % of the exempted income as per the clause (f) to Explanation-1 of Sec. 115JB of the Act subject to the condition that the disallowance shall not exceed the amount of disallowance determined by the authorities below. Disallowance on account of late payment of employees contribution to Provident fund - HELD THAT:- The delay in deposit made to the employees Provident fund and ESIC is not eligible for deduction by virtue of the decision of Hon’ble Gujarat High Court in the case of CIT versus GSRTC [2014 (1) TMI 502 - GUJARAT HIGH COURT]
|