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TMI Blog2010 (11) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... .3224/M/2007 - Assessment year 2003-04. The revenue in this appeal had raised disputes on two different grounds. 2.1 The first dispute is regarding disallowance of interest expenditure amounting to ₹ 68,55,615/- under section 14A of the Income-tax Act. AO noted that the assessee had made investment in shares to the tune of ₹ 13.08 crores income from which was not taxable. It was also noted by him that the assessee had taken interest bearing loans amounting to ₹ 290.01 crores on which interest of ₹ 18.99 crores had been claimed as deduction. AO therefore asked the assessee to explain as to why the interest should not be disallowed under section 14A of the Income-tax Act and as per AO the assessee gave no explanation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be deleted. The Learned DR on the other hand submitted that the various details submitted by the assessee before CIT(A) were not available before the AO. It was also submitted that the plea of dividend income be taxable had not been taken before the AO or CIT(A). 2.1.4 We have perused the records and considered the rival contentions carefully. The dispute is regarding disallowance of interest proportionate to the investment in shares. The AO had disallowed the interest on the ground that the dividend income was tax free. In appeal CIT(A) after considering the various details and evidence submitted before him allowed part relief. However we find that various details and evidence submitted before CIT(A) were not before the AO who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the provision for leave encashment while computing the book profit under section 115JB. It is a settled legal position that while computing the book profit only the specified adjustments as mentioned in Explanation 1 to section 115JB (2) can be made. Clause (c) of the Explanation 1 provides for adjustment of amount set aside as provision for meeting liability other than ascertained liabilities. The provision for leave encashment calculated as per the scheme is an ascertained liability actually incurred by the assessee in view of the judgment of Hon'ble Supreme Court in case of Bharat Earthmovers (supra). Therefore in our view no adjustments could be made on this account while computing the book profit. The order of CIT(A) deleting the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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