TMI Blog2016 (1) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of disallowance under section 14A r.w. Rule 8D made by the Assessing Officer while computing the book profit u/s 115JB - Held that:- We direct the Assessing Officer to adopt the book profits as per the Profit & Loss Account and do not make addition on account of disallowance worked out under section 14A of the Act, as such disallowance is computed under the normal provision of the Act, which are not applicable for determining book profits under section 115JB of the Act. - I.T.A.No.1703/Mds/2015, C.O.No.100/Mds/2015 - - - Dated:- 16-10-2015 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER For The Department : Shri A.V. Sreekanth, JCIT For The Assessee : Shri V. Tharish, CA ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the book profit u/s 115JB of the Act. 7. After hearing both parties, we find that this issue came up for consideration before this Tribunal in the case of Dy. CIT vs M/s Lanco Tanjore Power Co. Ltd. in I.T.A.No.312/Mds/2013, and vide order dated 21.8.2013 the Tribunal has observed as follows: 13. We have heard both sides, perused the material on record and gone through the orders of authorities below. The case of the Revenue is that whether addition to the book profit shall be made on account of alleged expenditure incurred to earn exempt income while computing the income under section 115JB of the Act. In the case of Goetze (India) Ltd. v. CIT (supra), the Delhi Bench of ITAT has observed as under: 4.6 We have conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that this argument is inconsequential for the reason that expenditure incurred in earning an income may at times be more than the income itself, say, in case of an industrial company in the first year of its operation when large amount of depreciation is claimed for deduction or when large amount of advertisement expenditure is incurred, such cases may result into loss, which can also happen in the case of dividend income where expenditure by way of interest on borrowed capital for investment and other expenses may exceed the dividend income. One of the arguments of the learned Departmental Representative was that the disallowance worked out on the basis of the order of the Special Bench of the Tribunal in the case of aforesaid Daga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 115JB. The Assessing Officer while computing the book profits had added back disallowance worked out under section 14A of the Act to the net profits of the business. The plea of the assessee in this regard was that the assessee itself had disallowed sum of ₹ 42,37,722/ -on account of disallowance under section 14A of the Act under regular provisions and ₹ 32,86,397/ -under section 115JB provision in its return of income on proportionate basis. The Assessing Officer recomputed the book profits under section 115JB of the Act and the CIT (Appeals) deleted the same against which the Revenue is in appeal. 6. We find that similar issue of computation of book profits under section 115JB of the Act in view of readjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n turn following the ratio laid down by the Apex Court in Apollo Tyres Ltd. 255 ITR 273 (SC). We are in conformity with the order of CIT(A). The adjustments, if any, to be made to the profit shown in the profit and loss account, are provided in the section 115 JB of the Act itself. There is no provision in the Act to make adjustment on account of notional disallowance worked out under section 14A of the Act. The Hon'ble Supreme Court in Apollo Tyres Ltd. (supra) held that the profits of the business are not to be disturbed for computing the book profits except in the circumstances provided under the said Act. We confirm the order of CIT in this regard and dismiss the ground No.1(iv) raised by the Revenue. 6. The issue arising in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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