TMI Blog2021 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income earned for the year. Computation of book profit u/s.115JB of the Act towards disallowance of expenditure in relation to exempt income u/s.14A read with Rule 8D - This issue is also covered in the case of Vireet Investments Private Limited [ 2017 (6) TMI 1124 - ITAT DELHI] wherein held computation under clause (f) of Explanation 1 to section 115JB(ii) of the Act is to be made without resorting to computation as contemplated u/s.14A read with Rule 8D of I.T. Rules, 1962. Therefore, we are of the considered view that Assessing Officer cannot make additions towards computation of disallowance u/s.14A read with Rule 8D of I.T. Rules, 1962, to the book profit computed u/s.115JB. Appeal filed by the assessee is allowed. - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire dividends ₹ 24,611/- were credited at par in appellant s accounts with banks. 1.7 The formalities to be observed and the man power required in making and maintaining investments as in the case of investment companies and as discussed by the Assessing Officer are not present in full force in the appellant company as it is practically an one man company and the investments are static for several years and are incidental to appellant s business. 2. Clause (f) of explanation 1 to sec 115JB of tile IT Act: 2.1 In computing the Book profit under section 115JB of the Act, the Assessing Officer added ₹ 129,66,368/- being the disallowance under section 14A of the IT Act which is also now under dispute (supra) in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled reasons recorded in his appellate order dated 31.01.2019 upheld the additions made by the Assessing Officer towards disallowance of expenditure incurred in relation to exempt income under section 14A read with Rule 8D of I.T.Rules, 1962, by holding that even in a case where assessee claims that no expenditure has been so incurred, the statute has provided for presumptive expenditure which has to be disallowed. The learned CIT(A) also upheld the additions made by the Assessing Officer towards disallowance u/s.14A read with Rule 8D of I.T. Rules, 1962 to book profit computed u/s.115JB of the Act, by following the decision of ITAT., Mumbai in the case of DCIT Vs. Viraj Profiles Ltd (2016) 156 ITD 76. Aggrieved by the learned CIT(A) order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd. (supra), we direct the Assessing Officer to restrict the disallowance computed u/s.14A read with Rule 8D of I.T.Rules, 1962 to the extent of exempt income earned for the year. 5. Insofar as recomputation of book profit u/s.115JB of the Act towards disallowance of expenditure in relation to exempt income u/s.14A read with Rule 8D of I.T. Rules, 1962, we find ITAT., Delhi Special Bench in the case of ACIT vs. Vireet Investments (P) Ltd. [2017] 165 ITD 27 (Delhi Trib.) (SB) has considered an identical issue and after considering relevant facts held that computation under clause (f) of Explanation 1 to section 115JB(ii) of the Act is to be made without resorting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
