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2020 (6) TMI 608 - AT - Income TaxRectification of mistake - disallowance u/s 14A - Computation of book profits u/s. 115JB - amount to be added to the profit as per P&L account u/s. 115JB towards expenditure incurred in earning income exempt u/s. Chapter III of the Act - plea of the assessee was that the disallowance u/s. 14A of the Act made while computing total income under the normal provisions of the Act should not be automatically added while determining the book profits u/s. 115JB - HELD THAT:- The amount to be added while computing book profits u/s. 115JB AO cannot in terms of Explanation 1(f) to Sec.115JB(2) to the Act, add the sum determined as disallowance u/s. 14A of the Act while computing total income under the normal provisions of the Act and he has to adopt a basis as laid down by VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] viz., direct expenditure associated with earning of income. The grievance of the revenue in this appeal as projected in ground No.2 is that the CIT(A) ought to have followed the decision in the case of DCIT Vs. Sobha Developers [2015 (2) TMI 940 - ITAT BANGALORE] rendered by ITAT Bangalore Bench wherein it was held that the disallowance u/s.14A of the Act made while computing total income under the normal provisions of the Act can also be adopted while determining book profits u/s.115JB in terms of Explanation- 1(f) to Sec.115JB(2) of the Act. The ratio laid down in the said decision of the Bangalore Bench has not been approved in the case of Vireet Investments (supra), which decision was rendered after the decision rendered by the Bangalore Bench of ITAT. As far as the grievance of the revenue projected in Gr.No.3 is concerned, the subject matter of the impugned order is only as to, whether there was a mistake apparent from the record in the order of CIT(A) dated 2.4.2019 and not the issue whether not making addition of disallowance u/s.115JB(2) explanation-1(f) of expenses incurred to earn income which is exempt u/s.10 is a mistake apparent from the record or not. In other words, the issue sought to be raised by the revenue in ground No.3 can arise only in an appeal against the order dated 2.4.2019 and not in an appeal against the impugned order.
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