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2016 (1) TMI 219 - ITAT CHENNAI

2016 (1) TMI 219 - ITAT CHENNAI - TMI - Exclusion of overseas travel and communication expenditure incurred in foreign currency from the total turnover for the purpose of deduction u/s 10B - Held that:- This issue is squarely covered by the order of the Chennai Special Bench in the case of ITO vs Sak Soft Ltd, [2009 (3) TMI 243 - ITAT MADRAS-D] wherein it was held that when any such amount is deducted from the export turnover from the numerator, the same shall also be deducted from the total tur .....

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he 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 CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal of the Revenue and the cross objection of the assessee are directed against the order of th .....

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erein it was held that when any such amount is deducted from the export turnover from the numerator, the same shall also be deducted from the total turnover in the denominator while applying the formula (Profit X Export turnover ÷ Total turnover) as provided under the Act. 4. In view of the above, we are inclined to dismiss the ground taken by the Revenue. Accordingly, the Revenue s appeal is dismissed. 5. In the cross objection, the assessee has taken ground Nos. 1.1 and 1.2 in support o .....

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n 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) .....

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owed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. Since we are dealing with the issue of expenditure relating to dividend income, a matter falling under Chapter III, it becomes clear on perusal of these two provisions that they are similar in nature. Clause (f) uses the words "expenditure relatable to any income", while s. 14A uses the words "expenditure incurred by the assessee in relation to .....

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ounsel was that the expenditure disallowed by the learned CIT(A) was more than the dividend income. We 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 happ .....

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Ltd. (supra) heavily relied on the rules framed under sub-s. (2) of s. 14A, which is not applicable while interpreting cl. (f) of the Explanation. 14. In the case of Quippo Telecom Infrastructure Ltd. v. ACIT (supra), the Tribunal has observed that no 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. Therefore, we, respectfully following the decision of the Coordinate Bench of Delh .....

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e Tribunal in ACIT Vs. M/s Nahar Capital & Financial Services Ltd. and the Tribunal in ITA No.870/Chd/2013 relating to assessment year 2010 -11 vide order dated 6.6.2014 held as under: 5. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to computation of book profits 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 .....

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e of computation of book profits under section 115JB of the Act in view of readjustment on account of disallowance under section 14A of the Act arose before the Tribunal in assessee s own case relating to assessment year 2008 09. The Tribunal in ITA No.1120/Chd/2011 vide order dated 27.7.2012 in turn relying on an earlier decision of the Chandigarh Bench of the Tribunal in DCIT Vs. Ind Swift Ltd. in ITA No.729/Chd/2009 relating to assessment year 2006 -07 - date of order 30.11.2009 held as under .....

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igarh Bench of the Tribunal in DCIT Vs. Ind- Swift Ltd. (supra) where vide order dated 30.11.2009 vide para 8 it was held as under: 8. The ground 1(iv) raised by the Revenue is against the computation of book profits u/s 115 JB of the Act. The Assessing Officer while computing the book profit u/s 115JB of the Act had added back the disallowance worked u/s 14A of the I.T. Act to the net profit shown in the profit and loss account and computed the profits for the year. The CIT (A) reworked the boo .....

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