JCIT (OSD), LTU-2, CHENNAI vs. M/S SHREE AMBIKA SUGARS LTD., CHENNAI

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ITA 1764/CHNY/2019Status: DisposedITAT Chennai27 September 2019AY 2010-114 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) followed a Special Bench decision and held that disallowance under Section 14A cannot be added to book profits under Section 115JB. The Tribunal agreed with the CIT(A) and found no reason to interfere.

What were the facts?

The Assessing Officer (AO) added disallowance made under Section 14A read with Rule 8D to the book profits under Section 115JB. The assessee contended that no other adjustments can be made to book profits except those listed in Explanation-1 to Section 115JB.

What were the issues?

Whether disallowance under Section 14A can be added to book profits computed under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN

For Appellant: Mr. Saroj Kumar Parida, Adv
For Respondent: Mr. Arunraj, JCIT, Mr. Saroj Kumar Parida, Adv
Hearing: 27.09.2019

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

The Revenue filed this appeal against the Order of the Commissioner of Income Tax (Appeals)-10, Chennai, in ITA No.266/16-17/CIT(A)-10(Tr.) dated 29.03.2019 for the AY 2010-11.

2.

M/s.Shree Ambica Sugars Ltd., the assessee is manufacturer of sugar-cum-generation of power and distilleries. While making the re-assessment u/s.143(3) r.w.s.147 of the Act for the AY 2010-11, the AO added the disallowance made u/s.14A r.w.r.8D to the book profits.

3. Aggrieved against that order, the assessee filed this appeal before the Ld.CIT(A) contending that while computing the book profits u/s.115JB no other adjustments can be made to the book profits u/s.115JB other than those listed in Explanation-1 to Sec.115JB and therefore, the AO has no power to make adjustment u/s.115JB with respect to the disallowance made u/s.14A. The Ld.CIT(A) followed the decision of the Special Bench of the Delhi Tribunal in the case of ACIT v. Vireet Investment (P) Ltd., reported in [2017] 82 taxmann.com 415 and held that the disallowance made u/s.14A cannot be added in the book profits u/s.115JB.

Therefore, he directed the AO to delete the addition.

4.

Aggrieved against that order, the Revenue filed this appeal with the following grounds of appeal:

1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case.

2.1 The learned CIT(A) has erred and held that the disallowance u/s.14A cannot be added in the book profit u/s.115JB of the IT. Act. 2.2 The learned CIT(A) has failed to appreciate the ruling in the case of DCIT, Central Circle 18 and 19, Mumbai Vs. Viraj Profiles Limited in 64 Taxmann.com 52(2015) (Mumbai-Trib) wherein it was held that AO has rightly disallowed the expenditure u/s.14A of the Act read with Rule 8D of the Income Tax Rules for computing book profit u/s.115JB(2) of the Act read with clause (f) to Explanation 1 to Section 115JB(2) of the Act.

3.

For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing officer be restored.

5.

The Ld.DR presented the case on the lines of the grounds of appeal. Per contra, the Ld.AR supported the order of the Ld.CIT(A).

6. We heard the rival submissions and gone through the relevant materials.Since, the Ld.CIT(A) followed the decision of the Special Bench of the Delhi Tribunal in the case of ACIT v. Vireet Investment (P) Ltd., supra, we do not find any reason to interfere with the order of the Ld.CIT(A).

7.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on the 27th day of September, 2019, in Chennai.

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