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Income Tax Appellate Tribunal, ‘D‘ BENCH
Before: SHRI AMIT SHUKLA & MS PADMAVATHY S
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against the order dated 19/10/2022 passed by NFAC, Delhi in relation to the rectification proceedings u/s.154.
In the grounds of appeal, assessee has raised the following grounds:- 1) The Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi erred in confirming order w/s.
M/s. Multi-Act Trade & Investments Pvt. Ltd. 154 r.w.s 143(3) of The IT Act, 1961 by making addition w/s.14A r.w.r 8D(iii) for Rs.22,49,727/- to the income declared u/s. 115JB, as the same is not mistake apparent from record and hence out of the purview of rectification u/s 154 of The IT Act, 1961. This addition is a debatable issue as there are various decisions in favour of the assessee. 2) The Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi erred in confirming order u/s. 154 r.ws 143(3) of The IT Act, 1961 by making addition u/s 14A r.w.r 8D for Rs.22,49,727/- with out considering the decisions relied upon by Appellant while filling the return in the case of Pr. CIT V. Bhushan Steel Ltd. [ITA No 593/2015] and Delhi ITAT Special Bench decision in the case ACIT Circle, 17(1),New Delhi Vs. Vircet Investment (P) Ltd, [2017] 82 taxmann.com 415 (Delhi - Trib.) (SB) Dated 16-06-2017.
The Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi erred in confirming order u/s. 154 r.ws 143(3) of The IT Act, 1961 by making addition u/s.14A r.w.r 8D without considering the Audit Report filed u/s.115JB in Form 29B filed for AY-2017-2018.
The Appellant reserves right to add, amend or alter the above ground of appeal
as and when necessary.
3. Thus, in short the issue involved is whether addition u/s.14A r.w.r. 8D(2)(iii) can be adjusted while computing the book profit u/s.115JB. Here in this case, in the order passed u/s.143(3) dated 10/12/2019 income was determined at Rs.25,12,700/- under the normal provisions of the Act and Rs.1,46,27,579/- u/s.115 JB. The assessee had made suomoto disallowance of Rs.22,49,727/- u/s.147 under the normal provisions of the Act, whereas, the same was not added while M/s. Multi-Act Trade & Investments Pvt. Ltd. computing book profit u/s.115JB. In the assessment order, the ld. AO did not make any adjustment on account of disallowance u/s.14A which was suomoto made by the assessee under the normal provisions of the Act. The ld. AO initiated rectification proceedings u/s.154 for making the adjustment of disallowance u/s.14A of Rs.22,49,727/- under the book profit. The ld. CIT (A) too has confirmed the said adjustment.
4. After hearing both the parties and on perusal of the materials placed on record, we find that first of all the issue whether disallowance u/s.14A can be subject matter of adjustment while computing book profit u/s.115JB of the Act, is covered by the decision of Special Bench in the case of Vireet Investments (2017)82 taxmann.com 415 (Del. Trib-Special Bench), wherein it has been held that disallowance made u/s 14A cannot be adjusted in a book profit. In any case, this is highly debatable issue, whether disallowance u/s.14A can be made while computing book profit u/s.115JB or not, therefore, it is beyond the purview of rectification proceedings u/s.154. Accordingly, the adjustment of disallowance u/s.14A for Rs.22,49,727/- as in the book profit is hereby deleted, accordingly, grounds raised
by the assessee are allowed.
4. In the result, appeal of the assessee is allowed.