TMI Blog2021 (9) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... lternative plea of the assessee for claiming depreciation on said expenditure is infructuous and hence, not maintainable. The fact remains unchanged. The assessee failed to bring on record any valid reason to take a different view from the view taken by the learned CIT(A) and hence, we are inclined to uphold findings of the learned CIT(A) and reject ground taken by the assessee. Recomputation of book profit u/s.115JB - additions towards amount transferred to statutory reserve - HELD THAT:- We find that the Tribunal has considered identical issue and held that amount transferred to special reserve fund as required under section 45IC of the RBI Act, is only appropriation of profits below the line in the profit loss account and thus, same is not deductible while computing book profit u/s.115JB of the Income Tax Act, 1961. Therefore, consistent with view taken by co-ordinate Bench, we are inclined to uphold findings of the learned CIT(A) and reject ground taken by the assessee. Disallowance of expenses u/s.14A r.w.r 8D - As per assessee Nil exempt income earned for the relevant assessment year - HELD THAT:- The Hon ble Madras High Court in the case of Redington India Pvt.Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.115JB of the Act by making additions towards disallowance u/s.14A r.w.r 8D - We find that this issue is squarely covered in favour of the assessee by the decision in the case of ACIT Vs. M/s.Vireet Investments Pvt.Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] where it was held that computation under clause (f) of Explanation (1) to section 115JB of the Act is to be made without resorting to computation as contemplated u/s.14A r.w.r 8D of Income Tax Rules, 1962. The co-ordinate Bench of ITAT., Chennai in the case of Shriram Transport Finance Company [ 2017 (7) TMI 1396 - ITAT CHENNAI] had considered an identical issue and held that disallowances made u/s.14A by invoking Rule 8D cannot be added back to book profit computed u/s.115JB of the I.T Act, 1961. The learned CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer towards recomputation of book profit by making additions towards disallowance u/s.14A r.w.r 8D - I.T.A.No.1251/Chny/2019 And I.T.A.No.1298/Chny/2019 - - - Dated:- 8-9-2021 - Shri V.Durga Rao, Judicial Member And Shri G.Manjunatha, Accountant Member For the Appellant : Mr.R.Sivaraman, Advocate For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n royalty amount disallowed in assessment year 2006-07 to 2013-14. We find that learned CIT(A) has rejected alternative plea taken by the assessee claiming depreciation on royalty on the ground that when royalty expenses has been held to be revenue in nature and deductible, then alternative plea of the assessee for claiming depreciation on said expenditure is infructuous and hence, not maintainable. The fact remains unchanged. The assessee failed to bring on record any valid reason to take a different view from the view taken by the learned CIT(A) and hence, we are inclined to uphold findings of the learned CIT(A) and reject ground taken by the assessee. 6. The next issue that came up for our consideration from ground No.III (A) (i ii) of assessee appeal is recomputation of book profit u/s.115JB of the Income Tax Act, 1961, by making additions towards amount transferred to statutory reserve amounting to ₹ 1,04,40,00,000/-. The counsel for the assessee as well as DR for the revenue have agreed that this issue is covered against the assessee by the decision of the Tribunal in appellant s group company case of M/s. Shriram Transport Finance Co.Ltd./ Shriram Investments Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of expenditure u/s.14A of the Act. The Hon'ble Supreme Court has considered an identical issue and dismissed SLP filed by revenue against Hon ble Madras High Court ruling in the case of CIT vs.Chettinad Logistics Pvt.Ltd, and held that provisions of section 14A cannot be invoked, where no exempt income was earned by the assessee for relevant assessment year . In this case, the learned CIT(A) has recorded categorical finding that the assessee has not earned any exempt income for impugned assessment year and hence, deleted additions made by the Assessing Officer towards expenses u/s.14A of the Act. Hence, we are inclined to uphold findings of the learned CIT(A) and reject ground taken by the revenue. 12. The next issue that came up for our consideration from ground no.3 of revenue appeal is deletion of additions made towards disallowance of royalty expenditure. The learned A.R for the assessee Mr. R.Sivaraman, Advocate and learned DR present for the revenue have agreed that this issue is covered in favour of the assessee by the decision of Tribunal in assessee s own case for assessment year 2006-07 in ITA No. 726/Mds/2010 dated 16.12.2010, where the Tribunal held that roya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categorical finding in light of various evidences including list of payment of commission to individual recipients by the assessee and held that a sum of ₹ 80,89,524/- is out of scope of section 194H of the Act, because payment in respect of each person does not exceed ₹ 5000/- and hence, the assessee does not require to deduct TDS, as per provisions of section 194H of the Act, and thus, disallowance u/s.40(a)(ia) of the Act for non-deduction of TDS cannot be made. The revenue has failed to bring on record any evidence to counter findings of fact recorded by the learned CIT(A), except stating that the learned CIT(A) has accepted additional evidence in contravention of Rule 46A of Income Tax Rules,1962. Therefore, we are of the considered view that there is no error in the findings recorded by the learned CIT(A) to delete additions made towards commission payment of ₹ 80,89,524/- . As regards remaining commission payment of ₹ 18,44,989/-, the assessee sought for deduction on the ground that said payment has been made before end of relevant financial year in light of decision of the Hon ble Allahabad High Court in the case of CIT Vs.Vector Shipping Services P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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