TMI Blog2014 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... for re-examination. The direction is made that the addition of disallowance made u/s 14A cannot be made while computing book profit u/s 115JB of the Act - the AO has to record a categorical finding as to how he was not satisfied with the claim of the assessee regarding the expenditure incurred for earning the exempt income - The disallowance made u/s 14A cannot be included in the book profit for the purpose of section 115JB – Decided in favour of Assessee. - ITA No. 1222/Bang/2012 - - - Dated:- 25-7-2014 - Shri Rajpal Yadav And Shri Jason P. Boaz,JJ. For the Petitioner : Ms. Sheetal Borkar, Advocate For the Respondent : Shri L. V. Bhaskar Reddy,(DR) ORDER Per Rajpal Yadav, J.M. The assessee is in appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfronted the assessee as to why the disallownce may not be computed as per rule 8D. The assessee had filed written submission which has been reproduced by the Assessing Officer on page-2 of the assessment order. The Assessing Officer has ultimately arrived at a conclusion that the assessee had made investment of ₹ 6,19,90,114/- during the year. It has drawn from its OD account with the Syndicate Bank. Therefore, there is a nexus with the interest expenses, assessee incurred on the loan availed for business income vis- -vis its investment. The learned Assessing Officer has noticed the details of interest expenditure in Para 6 7 and according to the formula provided in Rule 8D, he worked out the disallowance of ₹ 36,96,051/-. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A), Mysore, dated 14-3-2013 for the assessment year 2010-11. The assessee is aggrieved by the order of the CIT(A) in confirming the disallowance made by the AO u/s 14A of the Income-tax Act, 1961[hereinafter referred to as 'the Act'] read with rule 8D of the Income-tax Rules, 1962 [hereinafter referred to as the Rules ]. The assessee has also raised a ground that the CIT(A) has erred in not considering the fact that the AO is not justified in making additions of disallowance made by him u/s 14A of the Act r.w. rule 8D of the Rules to the adjusted book profits computed u/s 115JB of the Act. 2. Brief facts of the case are that the assessee-company had filed its return of income on 30-9-2010 declaring loss of ₹ 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Aggrieved, the assessee preferred an appeal before the CIT(A) who confirmed the order of the AO and the assessee is in second appeal before us. 3. Learned counsel for the assessee, Smt.Sheetal, while reiterating the contentions raised by the assessee before the authorities below, submitted that in the case of the sister concern of the assessee viz. M/s.Manipal Media Networks Ltd., in ITA No.889/Bang/2013 dated 4-3-2014 for the assessment year 2010-11, B Bench of this Tribunal had remanded the issue to the file of the AO for de novo consideration in view of the decision of the Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. (cited supra). A copy of the said order is produced before us. Para.6 of the said order is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-examination to the file of the Assessing Officer. In the case on hand too, similarly, we find that the position is that the assessee has merely taken the stand that it has not incurred any direct or indirect expenditure in earning its dividend income which is exempt under section 10(34) of the Act. We are therefore of the view that it would be in the interest of equity and justice if the assessee makes its claim in this regard before the Assessing Officer. The Assessing Officer will examine the claim of the assessee and thereafter decide the issue in accordance with law and as explained in the judicial decisions referred to (supra). It is ordered accordingly. Since the facts and circumstances of the case before us are similar, we re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, we observed that the Assessing Officer has to record a categorical finding as to how he was not satisfied with the claim of the assessee regarding the expenditure incurred for earning the exempt income. The learned Assessing Officer shall examine this issue as per the observations of the Tribunal in assessment year 2010-11 and also consider the judgments of the Hon'ble Delhi High Court in the case of Maxopp Investments Ltd v. CIT reported in 347 ITR 272. With regard to the 2nd issue, there is no disparity on facts. The disallowance made u/s 14A cannot be included in the book profit for the purpose of section 115JB. 7. In view of the above, appeal filed by the assessee is allowed for statistical purposes. Order pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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