Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘D‘ BENCH
Before: SHRI AMIT SHUKLA & SHRI GAGAN GOYAL
Assessee by Ms. Janvi R. Gada Revenue by Smt. Mahita Nair Date of Hearing 19/01/2023 Date of 31/03/2023 Pronouncement आदेश / O R D E R PER AMIT SHUKLA (J.M):
The aforesaid appeal has been filed by the Revenue against the order dated 12/08/2022, passed by NFAC, Delhi for the quantum of assessment passed u/s. 143(3) r.w.s. 147 for the A.Y.2011-12.
M/s. Deep Financial Consultant Pvt. Ltd. 2. The only issue raised by the Revenue is deletion of adjustment of Rs.12,05,987/- on account of adjustment made u/s.115JB being the disallowance determined u/s.14A r.w.r. 8D.
The brief facts are that assessee had filed return of income for A.Y.2011-12 on 29/09/2011 showing ‘Nil’ income. Thereafter assessment order u/s. 143(3) was passed on 31/10/2013 determining income under normal provisions at loss of Rs. (- 37,56,361) and book profit u/s.115JB was computed at Rs.2,20,50,370/-. Since the taxable income under the provision of section 115JB was more, therefore, tax payable was computed u/s.115JB of the Act. Thereafter, the assessment was reopened by issuance of notice u/s.148 dated 31/03/2018 on the ground that in the new addition of disallowance u/s.14A of Rs. 12,05,987/- was made to the book profit u/s.115JB of the Act.
3.1. The ld. AO is of the opinion that the assessee had earned dividend income of Rs.44,53,091/- which was claimed as exempt and the assessee reduced the said dividend income at the time of computing the book profit u/s.115JB. He has noted that assessee has made disallowance u/s.14A in the computation of income alongwith return of income at Rs.12,05,987/- and was added to the total income under the normal provisions of the Act. However, assessee has not added the same disallowance u/s.14A of Rs.12,05,987/- while computing book profit u/s.115JB. Accordingly, the ld. AO added Rs.12,05,987/- as disallowance to the book profit u/s.115JB.
M/s. Deep Financial Consultant Pvt. Ltd. 3.2. The Ld. First Appellate Authority after considering the submissions made by the assessee, has deleted the said addition on the ground that, this issue stands covered in favour of the assessee by the Special Bench of ITAT in the case of ACIT vs. Vireet Investments Pvt. Ltd (2017) 58 ITR 313, wherein the Tribunal has held that no disallowance u/s.14A can be made while computing book profit u/s.115JB. Apart from that, he has also referred to ITAT Mumbai Bench in the case of Reliance Industrial Infrastructure Ltd vs. Addl. CIT in & 70/Mum/2009.
After hearing both the parties and on perusal of the impugned order, we find that only the issue is, whether the disallowance u/s.14A which was made by the assessee and added to the computation of income under the normal provisions of the Act, whether same should be added to the book profit u/s.115JB of the Act. Now this issue stands covered by series of the decisions of the Tribunal following the judgment of Special Bench in the case of Vireet Investments Pvt. Ltd. vs ACIT. ITAT Special Bench has also held that computation under Clause ‘f’ of Explanation-1 to Section 115JB(2) of the Act is to be made without resorting to the computation as contemplated u/s.14A r.w.r. 8D and therefore, it cannot be added to the book profit u/s.115JB. Accordingly, we do not find any infirmity in the order of the ld. CIT(A) and consequently the Revenue’s appeal is dismissed.
In the result, appeal of the Revenue is dismissed.
M/s. Deep Financial Consultant Pvt. Ltd. Order pronounced on 31st March, 2023