TMI Blog2019 (9) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... 5JB - HELD THAT:- In the case of ACIT v. Vireet Investment (P) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] the Delhi Special Bench of the Tribunal has given a categorical findings that the computation under clause (f) of Explanation 1 to section 115JB(2) of the Act is to be made without resorting to computation as contemplated under section 14A read with rule 8D. By following the above decisions, the ld. CIT(A) directed the Assessing Officer to exclude the disallowance under section 14A r.w. rule 8D while computing MAT under section 115JB of the Act. The ld. DR could not controvert the above decisions of the Tribunal. Revenue appeal dismissed. - I.T.A.Nos.1592 And 1593/Chny/2018 - - - Dated:- 26-6-2019 - Shri Duvvuru RL Reddy, Judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 14A r.w. Rule 8D. It was the submissions of the assessee before the Assessing Officer that since no exempt income was earned during the relevant assessment years, no disallowance under section 14A r.w. Rule 8D is called for. In view of the CBDT Circular No. 5 of 2014 dated 11.02.2014, wherein it was clarified that the Rule 8D read with section 14A of the Act provides for disallowance of expenditure even where tax payer in a particular year has not earned any exempt income, the Assessing Officer determined the disallowance under section 14A r.w. Rule 8D and brought to tax for both the assessment years. 3. The assessee carried the matter in appeal before the ld. CIT(A). By following the decision of the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue relates to disallowance under section 14A for book profit calculation under section 115JB of the Act. On perusal of the computation of income, the Assessing Officer asked the assessee to file explanation as to why disallowance under section 14A of the Act should not be considered for the purpose of MAT calculation also. After considering the submissions of the assessee, in view of the Clause (f) to Explanation 1 to section 115JB of the Act as well as following various decisions, the Assessing Officer has included the disallowance under section 14A of the Act while computing MAT under section 115JB of the Act. 6.1 On appeal, after considering various decisions of various Benches, the ld. CIT(A) directed the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of clause (f) of Explanation-1 to Section-115JB, confirmed the order of the Ld. Assessing Officer. The relevant portion of the order of the Ld. CIT (A) is reproduced herein below for reference:- 10.2 I have gone through the facts and circumstances of the case. The Assessing Officer has taxed the income U/s.115JB since the tax on book profits is more than the tax under normal computation. While doing so, she made disallowance of the amount relatable to exempt income on the basis of the amount worked out U/s.14A r.w. Rule 8D under normal computation. The provisions of clause (f) of Explanation-1 to s.115JB makes it abundantly clear that the amount of expenditure relatable to any exempt income, other than s.10(38), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the above it is apparent that the aforesaid provision of the Act does not refer to any disallowance made U/s.14A of the Act while arriving at the Book Profit for the purpose of Section-115JB(2) of the Act. Further Section 14A of the Act is a provision with fiction disallowing the deemed expenditure attributable to exempt income viz., dividend income U/s. 10 of the Act and Section 115JB of the Act is also a provision with fiction for payment of tax in respect of deemed income. Therefore while computing the profit for the purpose of Section 115JB of the Act another provision with fiction cannot be superimposed. Hence the question of increasing the Book Profit due to the disallowance U/s.14A of the Act will not arise. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o maintain its accounts in a manner provided by that Act and the same to be scrutinised and certified by statutory auditors and approved by the company in general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and be satisfied that the accounts of the company are maintained in accordance with the requirements of the Companies Act. Sub-section (1A) of section 115J does not empower the Assessing Officer to embark upon a fresh enquiry in regard to the entries made in the books of account of the company. From the above decision it is clear that while computing the Book Profit of the company under the provisions of section 115JB of the Act; any disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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