TMI Blog2018 (6) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... iance is place on the judgement of THE COMMISSIONER OF INCOME TAX VERSUS RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT] where it is held that investments were from interest free funds available with assessee - thus CIT(A) rightly directed disallowance @ .5% on the dividend earning scrip - Decided partly in favor of assessee. Disallowance u/s 14A r.w.r. 8D for the purpose of computing book profit u/s 115JB - Held that:- he issue is squarely covered by the decision of Hon’ble jurisdictional High Court in the case of CIT Vs. Jayshree Tea & Industries Ltd. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] where it is held that the provision of section 115JB in the matter of computation is a complete code in itself and resort need not and cannot be made to section 14A - thus respectfully following the orders we restore the matter to AO to calculate the book profit u/s. 115JB - assessee’s appeal is allowed for statistical purpose. Disallowance on account of provision for leave encashment u/s 43B(f) - Held that:- the matter is restored back to the file of AO for adjudication as per the decision of M/S. S.R. BATLIBOI & CO. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as allowed by the CBDT from 30.09.2010 to 15.10.2010, the Ld. CIT(A) deleted the disallowance by observing as under: 3.2. Thus, it has been submitted that the appellant had deducted tax in terms of section 194C on the 'coal washing charges' paid by it but had not been deposited in the government account by 30.09.2010 which was normal due date of filing of return applicable to the appellant company. It has been informed that the payment had actually been made on 6.10.2010 which has been mentioned on the relevant TDS certificates and TDS return also. It is seen that during the year under consideration due date for filing of return had been extended by CBDT from 30.09.2010 to 15.10.10 vide order F.N. 225/72/2010/lT(A-II) dated 27.09.2010. In this order it has been mentioned that:- on consideration of the reports of disturbance of general life caused due to floods and heavy rains, the CBDT, in exercise of powers conferred under section 119 of I. T. Act, 1961, hereby extends the due date of filing of returns of income for the assessment year 2010-11 from 30.09.2010 to 15th October, 2010. Thus, due date of filing of return of income for the assessment year unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the next year on the strength of the TDS certificate as per the proviso to sec. 40(a)(ia) of the Act as rightly observed by the Ld. CIT(A). So in any way the action of Ld. CIT(A) will in no way prejudice the Revenue. We fully agree with the reasoning and factual conclusion of Ld. CIT(A) (supra). Since Ld. DR could not point out any error in the impugned order of Ld. CIT(A), we find no infirmity in his order in deleting the disallowance as made by the AO. Hence, we uphold the order of Ld. CIT(A). Therefore, this ground of appeal of revenue is dismissed. 3. Ground no. 2 of the revenue s appeal and ground no.2 of assessee s appeal is against the order of Ld. CIT(A) in holding that while computing disallowance u/s. 14A read with rule 8D of the I. T Rules, 1962 (hereinafter called Rules ) only dividend yielding investment are to be considered and disallowance of ₹ 10,76,91,188/- should be rectified accordingly. 3.1. Briefly stated facts of the case are that during the course of assessment proceedings the AO observed that the assessee company claimed exempt dividend income of ₹ 3,08,00,805/- during the year and added back an amount of ₹ 6,25,966/- on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 36(1)(iii). G.D. Metsteel Pvt. Ltd. vs.- ACIT reported in 142 TTJ 641 (Mumbai Tribunal) Held that the investments are made by the assessee s own funds and have been made in the earlier years, no disallowance u/s 14A is required to be made. The Head Note reads as under:- Business expenditure-Disallowance under section 14A-Apportionment of expenditure- When investments are made from own funds, merely because the assessee had to subsequently borrow the funds for business use, it cannot be said that the borrowed funds have been used for the purposes of investments . CIT vs.- HDFC Bank Ltd reported in 366 ITR 505 (Bom.) Held, dismissing the appeal, (i) that the finding of fact given by the Tribunal was that the assessee s own funds and other non-interest bearing funds were more than the investment in the tax-free securities. This factual position was not one that was disputed. Undisputedly, the assessee s capital, profit reserves, surplus and current account deposits were higher than the investment in the tax free securities. In view of this factual position, it would have to be presumed that the investment made by the assessee would be out of the interest free funds a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has erred in law in upholding the order of CIT(Appeals) that disallowance under Section 14A of the I. T. Act, 1961, amounting to ₹ 2,20,15,787/- is not to be considered for book profit for calculation of book profit under section 115JB of the I. T. Act, 1961? On this question, the Hon ble High Court has observed as under: We find computation of the amount of expenditure relatable to exempted income of the assessee must be made since the assessee has not claimed such expenditure to be Nil. Such computation must be made by applying clause (f) of Explanation 1 u/s. 115JB of the Act. We remand the matter for such computation to be made by the learned Tribunal. We also note that the Special Bench of ITAT Delhi bench in ACIT Vs. Vireet Investment (P) Ltd. (2017) 82 taxmann.com 415 (Delhi.Trib (SB) has held as under: 6.22. In view of above discussion, we answer the question referred to us in favour of assessee by holding that the computation under clause (f) Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s. 14A read with Rule 8D of the Income-tax Rules, 1962. Respectfully following the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying on the decision of the Hon ble Kolkata High Court in the case of M/s. Exide Industries Ltd. reported in 292 ITR 470. However, the Assessing Officer did not accept the assessee s claim observing that Department has preferred a Special Leave Petition before the Hon ble Supreme Court and stay of the order of the Hon ble Kolkata High Court was granted by the Hon ble Apex Court. Ld. senior counsel submitted that under identical circumstances, Tribunal has restored the matter to the file of Assessing Officer to decide the issue in accordance with the decision of the Hon ble Apex Court in the case of DCIT, Circle-8, Kolkata vs.- M/s. Ernst Young Pvt. Ltd. in ITA No. 1787/Kol./2008. He, therefore, submitted that the matter may be restored back to the file of Assessing Officer. 4. Learned Departmental Representative did not raise any objection. 5. We have considered the submissions of both the parties and have perused the records of the case. We find that Tribunal on identical issue in ITA No. 1787/Kol./2008 in the case of M/s. Ernst Young Pvt. Ltd. has observed at para 12 in page 6 as under :- 12. Ground No. 5 of the revenue s appeal is against the relief allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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