DCIT, CENTRAL CIRCLE-1(4), KOLKATA, KOLKATA vs. M/S GREENPLY INDUSTRIES LTD., KOLKATA

The appeal filed by the revenue is against the order of Ld. CIT(A)-20, Kolkata dated 31.08.2016 for AY 2012-13 on the following revised grounds:

At the time of hearing Ld. DR could not point out what was the additional evidence that has been adduced afresh at the time of hearing before the Ld. CIT(A), therefore, in the absence of the same, ground no. 1 cannot survive and is, therefore, dismissed.

In respect of ground no. 1(a), brief facts of the case are that the AO disallowed Rs.42,43,850/- by invoking sec. 14A read with Rule 8D of the Income Tax Rules, 1962 and Greenply Industries Ltd., AY- 2012-13 disallowed it on the book profit of the assessee determined u/s. 115JB of the Act and has deleted the disallowance made by the AO. Aggrieved, revenue is before us.

We have heard rival submissions and gone through the facts and circumstances of the case. It is observed that a similar issue relating to addition on account of expenditure disallowed under section 14A while computing book profit under section 115JB of the Act has been decided by the Special Bench of this Tribunal at Delhi in the case of ACIT vs Vireet Investment Pvt. Ltd. (ITA No. 502/Del/2012 dated 16.06.2017) wherein it was held, after taking into consideration the decision of Delhi High Court in the case of Goetze (India) Ltd. (supra), that the expenditure incurred to earn exempt income computed under section 14A of the Act could not be added while computing book profit under section 115JB of the Act. In the case of CIT vs Jayshree Tea Industries Ltd. (ITAT No. 47 of 2014 dated 19.11.2014), Hon’ble Kolkata High Court has also expressed a similar view by holding that the provision of section 115JB in the matter of computation is a complete code in itself and resort need not and cannot be made to section 14A of the Act. Hon’ble Kolkata High Court has further held that the computation of the amount of expenditure relatable to exempt income of the assessee must be made independently by applying clause (f) of Explanation (1) under section 115JB of the Act where the assessee has not claimed such expenditure to be nil. Respectfully following the said decision of the Hon’ble Jurisdictional High Court in the case of Jayshree Tea Industries Ltd. (supra), we set aside the impugned order of the Ld. CIT(A) on this issue and restore the matter to the file of the A.O. for computing the amount of expenditure relatable to the exempted income of the assessee independently by applying clause (f) of Explanation (1) under section 115JB of the Act without resorting to section 14A or Rule 8D. This ground of the assessee’s appeal is thus partly allowed. 6. In the result, appeal of revenue is dismissed.