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2015 (8) TMI 113 - ITAT DELHI

2015 (8) TMI 113 - ITAT DELHI - TMI - Disallowance u/s 14A of the Act r.w.r. 8D - recalculation of the profit for purpose of computing the MAT u/s 115JB of the Act - Held that:- We are inclined to hold that the issue disallowance u/s 14A of the Act r.w.r. 8D of the Rules in both the appeals is squarely covered in favour of the assessee by the decision of Hon’ble jurisdiction High Court of Delhi in the case of Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT) and hence, we reached to a .....

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nnot be added to book profit u/s 115JB of the Act. Accordingly, we are inclined to hold that the direction of the CIT(A) in this regard are not sustainable in view of our conclusion in the earlier part of this order where we have hold that no disallowance u/s 14A of the Act r.w.r. 8D of the Rules is sustainable.- Decided in favour of assessee. - I.T.A .Nos.-563 & 564/Del/2013 - Dated:- 9-3-2015 - Shri Pramod Kumar And Shri C. M. Garg JJ. For the Appellant :-Sh. Ashwani Kumar, CA. & Sh. Adity .....

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hi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Assistant commissioner of Income Tax, Central Circle-13, New Delhi in adding back a sum of ₹ 47,36,570/- under section 14A of the Income Tax Act, 1961 on account of expenditure incurred in relation to exempt income while computing income under the normal provisions of the Income Tax Act, 1961. 2. That the order dated 26-11-2012 passed u/s 250 of the Income Tax Act, 1961 by the Lea .....

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ned Commissioner of Income Tax (Appeals) I, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi in adding back a sum of ₹ 4,03,33,786/- under section 14A of the Income Tax Act, 1961 on account of expenditure incurred in relation to exempt income while computing income under the normal provisions of the Income Tax Act, 1961. 2. That the order dated 26-11-2012 .....

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the disallowance under Rule 8D for computing income under the normal provisions of the Act. 3. That the order dated 26-11-2012 passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals) I, New Delhi is against law and facts on the file in as much as he was not justified to direct the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi to enhance the assessed income by recalculating the disallowance u/s 14A of the Income Tax Act, 196 aft .....

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ent years. 5. The assessee carried out the matter to the ld. CIT(A) but remained empty handed as the appeals of the assessee for both the assessment years were dismissed. The ld. CIT(A) also calculated that the amount of disallowance worked out by the AO was not correct and he enhanced the disallowance from ₹ 46,84,053/- to ₹ 47,99,535/- for AY 2009-10. 6. Now aggrieved the assessee is before this Tribunal in this second appeal with the grounds as reproduced hereinabove. Ground Nos. .....

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of the Rules on account of expenditure incurred in relation to exempt income while computing the income under normal provisions of the Act. 9. The ld. AR further contended that the ld. CIT(A) was not justified in enhancing the disallowance which was assessed by the AO without providing due opportunity to the assessee for AY 2009-10. The ld. AR reiterated the same arguments for appeal related to AY 2010-11 and also submitted that the ld. CIT(A) was not justified to direct the AO to enhanced the .....

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inal audited accounts submitted before the AO, there was no exempt income for the assessee which could attract disallowance u/s 14A r.w.r. 8D of the Rules. The ld. AR also placed his reliance on the decision of Hon ble Jurisdictional High Court of Delhi in the case of CIT vs. Holcim India Pvt. Ltd. dated 5.9.2014 in ITA No.586/2014 and 299/2014 and submitted that the assessee has invested in the company which were not showing in the profit under business strategy and there was no exempt income f .....

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then in absence of any tax free income the corresponding expenditure could not worked out for disallowance u/s 14A r.w.r. 8D of the Rules. 12. Replying to the above, the ld. DR submitted that rule 8D of the Rules is applicable to the AY 2009-10 and 2010-11 therefore, the AO was justified in invoking the provisions of section 14A of the Act r.w.r. 8D of the Rules. The ld. DR further submitted that the assessee may have earned income from investments in the subsequent year which would be exempt th .....

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sment years from the investment made by the assessee during relevant period. 14. We further note that the Schedule 13 forming part of accounts submitting before the AO for both the years also show that in the column of other income the assessee has not shown any exempt income during these two financial years relevant to the assessment years under consideration. We also observed that the ld. DR has not disputed this fact that the assessee has not earned any exempt income during both the financial .....

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es. 16. In the present case, similar facts and circumstances have been noted by us and therefore, we are inclined to hold that the issue disallowance u/s 14A of the Act r.w.r. 8D of the Rules in both the appeals is squarely covered in favour of the assessee by the decision of Hon ble jurisdiction High Court of Delhi in the case of Holcim India Pvt. Ltd. (Supra) and hence, we reached to a logical conclusion the disallowance calculated and made by the AO and upheld by the CIT(A) in both assessment .....

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