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2022 (10) TMI 830 - AT - Income TaxRectification u/s 154 - disallowance u/s 14A r.w.Rule 8D in computing book profit u/s 115JB in a proceeding u/s 154 - HELD THAT:- In the case of PCIT v. J.J.Glastronics (P.) Ltd. [2022 (4) TMI 1187 - KARNATAKA HIGH COURT] had held that in a proceeding u/s 154 of the I.T.Act, no disallowance u/s 14A can be made while computing book profit u/s 115JB of the I.T.Act. We hold that the A.O. is not justified in making disallowance u/s 14A r.w.Rule 8D in computing book profit u/s 115JB of the I.T.Act in a proceeding u/s 154. Inclusion of surplus in PSF(SC) does not qualify in any of the clauses (a) to (k) to Explanation 1 to section 115JB - In terms of the order dated 09.05.2006, of Airport Authority of India (AAI), collection and payment of Passenger Service Fees (Security Component) is to be managed by the assessee in trustee capacity for and on behalf of Airport Authority of India. In case any surplus amount remains, the same has to be transferred to Airport Authority of India as per clause (vi) of the aforesaid order dated 09.05.2006. Since the PSF(SC) is held by the assessee in a fiduciary capacity on behalf of Government of India, the assessee had maintained separate books of account. Admittedly, the accounts of the assessee are prepared in accordance with the provisions of Schedule III to Companies Act, 2013 (18 of 2013). There is no qualification from the Statutory Auditor, Director or the Registrar of Companies in regard to the non-inclusion of the amount of surplus in PSF(SC). Hence, the inclusion of surplus in PSF(SC) does not fall in any of the clauses (a) to (k) of Explanation to section 115JB of the I.T.Act. Hence, the adjustment so made by the A.O. in section 154 proceedings is contrary to the provisions and the settled legal position. In this context, we rely on the judicial pronouncements cited by the assessee in support of his case.
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