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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-11, Chennai in 16/CIT(A)-11 dated 23.06.2017 for assessment year 2012-13.
:-2-: ITA No.2158/Mdss/2017
2. M/s. Victory Financial Services Pvt. Ltd., the assessee, is in the finance and investment business. While computing the income from business for assessment year 2012-13, the assessee has worked out the disallowance u/s. 14A r.w.r. 8D at Rs. 14,66,165/- under the regular computation as well as under MAT computation u/s. 115JB. During the assessment proceedings, the assessee submitted the revised computation stating that the disallowance u/s. 14A r.w.r. 8D should be at Rs. 6,48,257/- only, which was not accepted by the Assessing Officer. Before the CIT(A), the assessee has claimed that the disallowance under MAT computation u/s. 115JB should not have been made by relying certain case laws. The CIT(A) did not accept the assessee’s stand for the reason that in the cases relied on by the assessee, the AO has made adjustments in both the normal computation as well as MAT computation u/s. 115JB, whereas, in the assessee’s case, the AO has not made any fresh adjustments, he has simply accepted the taxable income computed by the assessee for the purpose of arriving the tax liability and dismissed the appeal.
Aggrieved, the assessee filed this appeal with the following grounds:
“1. For that the order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case to the extent prejudicial to :-3-: ITA No.2158/Mdss/2017 the interest of the appellant and to any rate is opposed to the principles of equity, natural justice and fair play.
For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdictions 3. For that the Commissioner of Income Tax (Appeals) erred in upholding the disallowance u/s. 14A r.w.r. 8D to the extent of Rs. 14,66,165/- while computing book profits u/s. 115JB of the Income Tax Act.
4. For that the Commissioner of Income Tax (Appeals) failed to appreciate that disallowance u/s. 14A r.w.r. 8D should not be included for computation of book profits u/s. 115JB.
5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that fresh claims can be evaluated during appellate proceedings in the interest of justice 6. For that the appellant objects to the levy of interest of u/s. 234B and 234C.”
The AR relied on the judgement of the Delhi ITAT Special Bench decision in the case of ACIT, Circle 17(1), New Delhi vs Vireet Investment Pvt Ltd., in (Delhi) of 2012 CO No. 68 (Delhi) of 2014 for assessment year 2008-09, dated 16.06.2017. Per contra, the DR supported the order of the CIT(A).
We heard the rival submissions. After considering the decisions of the Hon’ble Delhi High Court taking diverse views, following the ratios laid in the case of CIT vs Vegetable Products Ltd., 88 ITR 192 SC, the Delhi ITAT Special Bench, supra, held that the computation under clause (f) of explanation 1 to section 115JB(2) is to be made without resorting to computation as contemplated u/s. 14A r.w.r. 8D of the Income Tax Rules,
:-4-: ITA No.2158/Mdss/2017 1962. The Revenue has not brought to our notice any decision rendered by the Jurisdictional High Court on this issue. In the facts and circumstances, following the Delhi Special Bench decision, the assessee’s plea is allowed and the appeal is allowed.
In the result, the assessee’s appeal is allowed.
Order pronounced on Tuesday, the 2nd day of January, 2018 at Chennai.