TMI Blog2024 (3) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case on hand, admittedly the exempted income is of Rs. 1,08,650/- only and therefore, respectfully following the judgments as discussed above, the disallowance cannot exceed the amount of exempted income. Hence, the ground of appeal of the assessee is partly allowed. Addition to the book profit u/s 115JB for the amount disallowed u/s 14A r.w. Rule 8D - HELD THAT:- We note that the in the case of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] has held that the disallowance made u/s 14A r.w.r. 8D cannot be the subject matter of disallowance while determining the net profit u/s 115JB of the Act. Thus, it can be concluded that the disallowance made under section 14A r.w.r. 8D cannot be resorted while determining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Member For the Assessee : Ms Amrin Pathan, AR For the Revenue : Shri Prateek Sharma, Sr.DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), Vadodara, arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2014-15. 2. The interconnected issue raised by the assessee in ground numbers 1 to 6 is that the Ld. CIT(A) erred in confirming the order of the AO by sustaining the addition of Rs. 99,34,511/- under the provisions of section 14A r.w. Rule 8D of Income Tax Rules. 3. The AO during the assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to income not includible in total income (Illustrations) - Assessment year 2014-15 - Assessing Officer made disallowance under section 14A read with rule 8D - Tribunal held that disallowance made under section 14A read with rule 8D could not exceed exempt income - Whether order of Tribunal was justified - Held, yes [Para 4.2] [In favour of assessee] 8.1 Likewise, the Hon ble SC in the case of Craft Builder Construction private limited reported in 112 taxmann.com 322 has held as under: SLP dismissed against High Court ruling that disallowance under section 14A cannot exceed exempt income of relevant year. 8.2 Now coming to the facts of the case on hand, admittedly the exempted income is of Rs. 1,08,650/- only and therefore, respectfully foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not in dispute. Therefore, we are not inclined to repeat the same. At the outset, we note that the Special Bench of Hon ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxmann.com 415 has held that the disallowance made u/s 14A r.w.r. 8D cannot be the subject matter of disallowance while determining the net profit u/s 115JB of the Act. The relevant portion of the said order is reproduced below: In view of above discussion, the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated under section 14A, read with rule 8D of the Income-tax Rules, 1962. 14.1 The ratio laid down by the Hon ble Tribunal is squarely applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction of the Hon'ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. (Supra). 14.4 Now the question arises to determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. In this regard, we note that there is no mechanism/ manner given under clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/ determine the expenses with respect to the exempted income. Therefore, in the given facts circumstances, we feel that an ad-hoc disallowance will serve the justice to the Revenue and assessee to avoid the multiplicity of the proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
