TMI Blog2013 (5) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. CIT [2009 (5) TMI 615 - ITAT DELHI] the amount disallowed u/s 14A cannot be added to the amount of book profit u/s 115JB. Unless a particular expenditure is debited to the profit and loss account relating to the earning of exempt income, the same cannot be imported into the computation of book profit as clause (f) of Explanation 1 to section 115JB which only refers to the amount debited to the profit and loss account - in favour of the assessee. - ITA Nos. 3850 /Mum/2010 - - - Dated:- 29-7-2011 - Shri J. Sudhakar Reddy (AM) And Smt. Asha Vijayaraghavan (JM),JJ. For the Appellant : Shri Vijay Mehta For the Respondent : Shri B. Jaya Kumar ORDER Per Asha Vijayaraghavan (JM). This appeal preferred by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, while computing the Book Profit u/s. 115JB of the I.T. Act. 4. Aggrieved by the order of the AO, assessee preferred an appeal before the Ld. CIT(A). 5. The first ground raised by the assessee reads as follows: 1. The CIT(A) erred in directing the AO to disallow the expenditure as per Rule 8D r.w. 14A of the I.T. Act. 1.1 The CIT(A) erred in enhancing the amount of disallowance u/s. 14A, by directing to disallow the expenditure as per Rule 8D as against the disallowance made by the AO based on the average cost of funds. 1.2 The CIT(A) erred in applying Rule 8D of I.T. Rules to the appellant for the A.Y. under appeal without appreciating the fact that Rule 8D was applicable from A.Y. 2007-08. 6. On perusal of the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reads as follows: The CIT(A) erred in directing the AO to adjust the book profits computed u/s. 115JB with the expenditure as per Rule 8D r.w.s.14A of the Act. 8. As already held in ground No. 1 the provisions of Rule 8D are not applicable to the present A.Y. under consideration. Therefore, disallowance of expenditure by applying Rule 8D is not justified. Further, no actual expenditure was debited in the profit loss account relating to the earning of exempt income. Therefore the provisions of Sec. 14A cannot be imported into while computing the book profit u/s. 115JB of the Act inasmuch as clause (f) of Explanation to Sec. 115JB refers to the amount debited to the profit loss account which can be added back to the book profit wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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