DCIT CORPORATE CIRCLE 1(1), CHENNAI vs. ACSYS INVESTMENTS PRIVATE LIMITED, CHENNAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that disallowance under Section 14A is a notional disallowance and cannot be added back while computing book profits under Section 115JB, relying on a Special Bench decision and a Karnataka High Court ruling.
What were the facts?
The Assessing Officer disallowed Rs. 18.01 Lacs under Section 14A and added it to the normal income. Subsequently, in a rectification order, the disallowance was also added while computing book profits under Section 115JB.
What were the issues?
Whether disallowance made under Section 14A can be added back while computing book profits under Section 115JB.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(2)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- ACIT v. Vireet Investment Pvt. Ltd.789 citing82 Taxmann.com 415 · 2017 · HC
- Sobha Developers Ltd. v. DCIT44 citing125 Taxmann.com 72 · 2021 · HC
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The sole grievance of the revenue in the aforesaid appeal for Assessment Year (AY) 2014-15 is adjustment of disallowance u/s 14A while computing Book Profits u/s 115JB. The assessee has been assessed u/s 143(3) on 25.11.2016 wherein Ld. AO computed disallowance u/s 14A for Rs.18.01 Lacs in terms of Rule 8D(2) and added the same while computing income under normal provisions. However, in rectification order u/s 154, Ld. AO added the disallowance 2 - while computing Book Profits u/s 115JB also. The assessee assailed this adjustment wherein Ld. CIT(A), relying on the decision of Special bench of Tribunal in Vireet Investment Pvt. Ltd. (82 Taxmann.com 415), deleted this adjustment. Aggrieved the revenue is in further appeal before us.
As rightly noted by Ld. CIT(A), this issue stood covered in assessee’s favor by the cited decision of special bench of this Tribunal. Subsequently, Hon’ble Karnataka High Court in Sobha Developers Ltd. vs. DCIT (125 Taxmann.com 72) held that disallowance u/s 14A is a notional disallowance and therefore, the same could not be added back while computing Book Profits u/s 115JB. Therefore, the impugned order could not be faulted with.
The appeal stand dismissed.
Order pronounced on 18th October, 2022.
More judgments on Section 14A
- Blacksoil Capital Private Limited (As… vs DCIT, Circle-1(1), HyderabadITA 2217/HYD/2026[2017-18]Status: Disposed9 Oct 2026AY 2017-18
- Hiral Construction, Mumbai vs ITO Ward 42(1)(2), MumbaiITA 8431/MUM/2025[2017-18]Status: Disposed8 Oct 2026AY 2017-18
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- M/S. Citi Bank N.A., Mumbai vs The Addl DIT (It) RG-1, MumbaiITA 4970/MUM/2007[2002-2003]Status: Disposed8 Oct 2026AY 2002-2003
- M/S American Express Bank Ltd., Mumbai vs The Jt DIT (It)1(1), MumbaiITA 9414/MUM/2004[2000-2001]Status: Disposed8 Oct 2026AY 2000-2001
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