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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The above titled two appeals have been preferred by the Revenue against the order dated 27.02.2018 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2012-13 & 2013-14.
The only issue raised by the revenue in the various grounds of appeals in both the years is against non confirmation of disallowance as made by the AO under section 14A of the Act read with Rule 8D to book profit as under section 115JB of the Act, 1961.
2 & 2993/M/2018 M/s. Hinduja Ventures Ltd. 3. The facts in brief are that the AO in the assessment proceedings calculated the disallowance under section 14A read with rule 8D at Rs.1,38,71,122/- in A.Y. 2012-13 and Rs.94,77,094/- in A.Y. 2013-14 and added the same while computing the book profit under section 115JB of the Act.
In the appellate proceedings, the Ld. CIT(A) partly sustained the addition under section 14A read with rule 8D while fully deleted the addition made under section 115JB of the Act by observing and holding as under: “The submission and arguments made by the AR and case laws relied upon has been duly considered ant the issue being directly covered by the decision of Hon'ble Bombay High Court in CIT vs. Bengal Finance & Investments Pvt. Ltd in its order dated 05..01.2018 where in the Hon'ble Bombay High Court has dismissed the appeal of the department and held that "So far as Question (b) is concerned, the impugned order of the Tribunal foliowed its decision in M/s. Essar Teleholdings Ltd. v/s. DCIT in to held that an amount disallowed under Section 14A of the Act cannot be added to arrive at book profit for purposes of Section 115JB of the Act. The Revenue's Appeal against the order of the Tribunal in M/s. Essar Teleholdings (supra) was dismissed by this Court in Income Tax Appeal No.438 of 2012 rendered on 7th August, 2014. In view of the above, question (b) does not raise any substantial question of law."
In view of the above discussed ratio, as the issue is directly covered by the above referred judgment of Hon'ble Bombay High Court, this ground of the appellant is allowed and the AO is directed to compute the Book Profit u/s. 115JB without considering the disallowance u/s. 14A.
Now the revenue has challenged the deletion of disallowance made u/s 14A rule 8D to the book profits in these appeals by the ld CIT(A). After hearing both the parties and perusing the material on record, we observe that the case of the assessee is covered in favour of the assessee and against the Revenue by the decision of the Hon’ble Jurisdictional Bombay High Court which has been followed by the Ld. CIT(A) and also 3 & 2993/M/2018 M/s. Hinduja Ventures Ltd. by the decision of the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments Pvt. Ltd. (2017) 82 taxman.com 415 (Del. Trib. –SB) wherein it has been held that computation under clause (f) of Explanation 1 to section 115JB sub section (2) has to be made without resorting to computation as contemplated under section 14A read with rule 8D. Accordingly, we dismiss both the appeals of the Revenue by upholding the order of the Ld. CIT(A).
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 13.05.2019.