TMI Blog2016 (3) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... t disallowable under section 14A of the Act vis-à-vis the income treated as exempt under the MAT provisions (i.e. 115JB of the Act) would vary. As per the calculation furnished by the assessee at the time of hearing, such disallowance works out to ₹ 7,58,633/- as against suo-moto disallowance of ₹ 6,07,845/- made by the assessee in the return of income. Therefore, in our view though the action of the CIT(A) is accepted in principle, the entire amount disallowed by the Assessing Officer could not have been deleted. As a consequence, it is directed that the total disallowance be fixed at ₹ 7,58,633/- (inclusive of suomoto disallowance of ₹ 6,07,845/- made by the assessee). - Decided partly in favour of revenue - ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s 115JB of the Act. Accordingly the AO computed the total income of the assessee at ₹ 10,13,46,870/- 2. Aggrieved by the assessment order the assessee challenged the order before the Ld. CIT(A). The CIT(A) relying upon the ratio laid down by the Hon ble Delhi Court in Maxopp Investment Ltd. Vs CIT(2012)247CTR(Del) and other cases relied upon by the appellant/assessee allowed the appeal of the assessee holding as under:- Now in the light of the forgoing, I find that Ld. AO has mechanically applied the provisions of section 14A. The appellant clearly brought out the facts that both the STCG of ₹ 56,62,674 and LTCG of ₹ 6,52,06,426 are included in the computation of Book Profit and only ₹ 92,41,515/- which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently upholding the assessee's claim of different computations of disallowance u/s 14A of the Act for the purpose of computation of book profit u/s 115JB and for the purpose of computation of total income under the regular provisions of the Act, without appreciating that such different computations of disallowance u/s 14A have not been provided in Section 14A or in Section 115JB of the Act 4. Before us, the Ld. DR has submitted that the Ld. CIT(A) has wrongly deleted the additional of ₹ 65,76,251/- u/s 14A of the Act made by the Assessing Officer to assessee s book profit and instead of upholding the addition of ₹ 6,07,845/- made by the assessee to its book profit on account of disallowance u/s 14A of the Act, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Spray Engineering Pvt. Ltd. (53 SOT 70). 7. We have heard the rival submissions and perused the documents on record in the light of the respective submissions of the parties. The only grievance of the revenue is that the Ld. CIT(A) has wrongly deleted the addition of ₹ 65,76,251/- made by AO to the book profit of the assessee under section 14A of the Act. 8. The assessee has calculated the disallowance under section 14A of the Act r/w Rule 8D of the Income Tax Rules 1962 to ascertain as to whether the tax is required to be paid under the normal provisions of the Act or to be paid under the provisions of section 115JB of the Act. Since the tax calculated on book profit was more than the tax calculated under general provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowable under section 14A. Rule 8D(2) of the Income Tax Rules, prescribes the method for determining the amount of expenditure in relation to the income not includable in the total income within the meaning of section 14A of the Act and Rule 8D(1) stipulates conditions under which the AO shall determine the amount of expenditure as per the method prescribed under rule 8D(2). 11. In the present case, the finally assessed income of the assessee has been computed in terms of section 115JB of the Act. The disallowance under section 14A of the Act under the normal provisions of the Act was determined at ₹ 65,76,251/-, wherein income by way of long term and short term capital gains and dividend was exempt. On the contrary, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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