TMI Blog2019 (2) TMI 1764X X X X Extracts X X X X X X X X Extracts X X X X ..... MAT computation u/s 115JB - This issue is squarely covered in favour of assessee and against Revenue by the decision of Special Bench of this Tribunal in the case of Vireet Investments (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] wherein the Tribunal has clearly held that no disallowance under section 14A of the Act r.w.r 8D of the Rules can be made while computing book profit under section 115JB of the Act. The learned Sr. DR could not controvert the above proposition. Accordingly, we are of the view that this issue is covered by the special bench decision of this Tribunal in the case of Vireet Investments (P.) Ltd. (supra). Respectfully following the same, we delete the disallowance and allow this issue of assessee s appeal. - ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the AO rejecting the contention of the assessee worked out the total disallowance u/s 14A read with rule 8D (2)(i), (ii) and (iii) at ₹ 20,41,380/- and after deducting the disallowance of ₹ 2,60,257/-, the AO made addition of ₹ 17,81,123/- and determined the total income of the assessee at ₹ 5,09,67,540/- under the normal provisions of Act and ₹ 75,69,233/- u/s 115JB of the Act. The assessee challenged the assessment order before the Ld. CIT (A). The Ld. CIT (A) vide the impugned order reduced the addition from 17,81,123/- to 12,39,009/- holding that appellant had not borrowings during the year relevant to the assessment year under consideration, in order to disallow the interest expenditure of ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional disallowance u/s 14A of ₹ 12,39,009/- directed to be made by Hon ble CIT (A) be deleted or appropriately reduced. 4. Without prejudice to the above, the Appellant prays that the AO be directed to exclude strategic investments while computing disallowance u/s 14A of the Act r.w.r 8D of the Income Tax Rules, 1962. Ground No. II: Addition of disallowance U/s 14A of the Act for computation of Book Profits U/s 115JB of the Act: 1. On the facts and circumstances of the case and in law, Hon ble CIT (A) erred in confirming the action of the AO of adding disallowance u/s 14A of the Act for the purpose of computation of book profits u/s 115JB of the Act. 2. The Appellant prays that the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng officer have nowhere pointed out any defect in the suo moto disallowance computed by the assessee in regard to expenses relatable to exempt income. Simply the AO has applied Rule 8D(2)(iii) and by applying the said formula he has computed the disallowance. According to us, this issue is squarely covered by the decision of Hon ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT [2018] 402 ITR 640 (SC), held as under: - 41. Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also make it clear that before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance under Section 14A was not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in favour of the assessee in the assessee s own case for the A.Y. 2008-09 and 2009-10. The relevant paras of the order of the coordinate Bench read as under:- 9. Another issue in ITA No. 8547/Mum/2011 for AY 2008-09 is as regards to the order of CIT(A) confirming the disallowance of expenses relatable to exempt income under section 14A while computing the book profit under section 115JB of the Act. For this assessee has raised the following ground No. II: - 1. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in confirming the addition made by the AO of a sum of ₹ 15.24.386/-to the computation of the Appellant u/s 115JB of the Act u/s. 14A read with rule 8D of Income Tax Rules, 1962. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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