TMI Blog2019 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Commissioner (Appeals) in directing the Assessing Officer to restrict the disallowance under section 14A of the Act to the exempt income earned by the assessee in respective assessment years. MAT computation - disallowance made while computing the book profit under section 115JB - HELD THAT:- It is evident that the AO has made such disallowance by resorting to the provisions of section 14A r/w rule 8D. As per the ratio laid down in Vireet Investment [ 2017 (6) TMI 1124 - ITAT DELHI] AO while computing the book profit u/s 115JB cannot make any disallowance by making reference to the provisions of section 14A r/w rule 8D. AO retains the power to make disallowance of expenditure incurred for earning exempt income as per Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the Assessing Officer noticed that in the assessment year 2013 14, the assessee has earned exempt income by way of dividend amounting to ₹ 48,865, and in assessment year 2014 15, it had earned exempt income by way of dividend of ₹ 1,08,136. However, he noticed that the assessee had not disallowed any expenditure under section 14A r/w rule 8D for earning the exempt income. Accordingly, he called upon the assessee to explain why disallowance under section 14A r/w rule 8D should not be made. Though, the assessee objected to the proposed disallowance by stating that the disallowance of expenditure made voluntarily also takes care of the expenditure attributable to exempt income, however, the Assessing Officer rejecting the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputing the book profit under section 115JB of the Act, no disallowance under section 14A r/w rule 8D can be made. 5. The learned Departmental Representative relying upon the observations of the Assessing Officer submitted that there is no condition under the provisions of section 14A of the Act to restrict the disallowance to the exempt income earned. He submitted, disallowance of expenditure under section 14A of the Act has to be made as per rule 8D(2). Further, he submitted, as per the decision of the Tribunal, Mumbai Bench, in DCIT v/s Viraj Profiles Ltd., [2016] 156 ITD 72 (Mum.), disallowance of expenditure for earning exempt income has to be made as per Explanation 1(f) of section 115JB(2). 6. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon by the learned Authorised Representative squarely support this view. That being the case, we do not find any reason to interfere with the decision of the learned Commissioner (Appeals) in directing the Assessing Officer to restrict the disallowance under section 14A of the Act to the exempt income earned by the assessee in respective assessment years. 9. As regards disallowance made by the Assessing Officer while computing the book profit under section 115JB of the Act, it is evident that the Assessing Officer has made such disallowance by resorting to the provisions of section 14A r/w rule 8D. In our view, as per the ratio laid down by the Tribunal, Special Bench Delhi, in Vireet Investment (supra), the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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