M/S. CALCUTTA SPRINGS LTD.,KOLKATA vs. D.C.I.T., CC- 1(2), KOLKATA, KOLKATA

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ITA 768/KOL/2022Status: DisposedITAT Kolkata22 February 2024AY 2014-2015Bench: Dr. Manish Borad (Accountant Member), Shri Sonjoy Sarma (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the Section 14A disallowance was deleted, it could not be considered for computing book profit under Section 115JB. Consequently, the addition made under Section 154 was set aside.

What were the facts?

The assessee's appeal concerns an addition of Rs. 5,42,823/- made for computing book profit under Section 115JB. This addition was based on a disallowance under Section 14A, which had previously been deleted by the Tribunal in regular assessment proceedings.

What were the issues?

Whether a Section 14A disallowance, which has been deleted, can be added back for computing book profit under Section 115JB. Whether interest under Section 220(2) is leviable on a deleted addition.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB,Section 154,Section 220(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH ‘C’, KOLKATA

Before: Dr. Manish Borad & Shri Sonjoy Sarma]

Hearing: 20.02.2024Pronounced: 22.02.2024

ORDER

Per Sonjoy Sarma, JM:

1.

This appeal of the assessee directed against the order of ld. CIT(A), Kolkata-20 dated 12.12.2022 is arising out of the order u/s 154 of the Income Tax Act dated 01.02.2022 framed by ACIT, Central Circle-1(2), Kolkata.

2.

Though the assessee has raised 6 grounds of appeal, the sole grievance is against the addition of Rs. 5,42,823/- computed u/s 14A of the Act for the purpose of computing book profit u/s 115JB of the Act.

3. At the outset, ld. counsel for the assessee submitted that an assessment was framed u/s 143(3) of the Act for A.Y. 2014-15 wherein disallowance u/s 14A of the Act was made. The matter travelled before the Hon’ble Tribunal and vide dated 11.07.2023 the disallowance u/s 14A of the Act was deleted. He further submitted that since the disallowance u/s 14A has itself being deleted, the same cannot be considered for

4.

On the other hand, ld. DR vehemently argued supporting the order of authorities below.

5.

We after hearing the rival submissions of the parties and perused the material available on record. We notice that the assessing officer while passing the order u/s 154 of the Act computed the book profit u/s 115JB of the Act by adding disallowance of Rs. 5,42,823/- made u/s 14A of the Act.

6.

We find that in the regular assessment proceedings u/s 143(3) the disallowance u/s 14A was made. However, since the assessee had not earned any dividend income during the year, This Tribunal placing reliance on the judgement of Hon’ble Delhi High Court in the case of Pr. CIT vs M/s. Era Infrastructure (India) Limited in of 2022 dated 20.07.2022 deleted the disallowance u/s 14A of the Act. Therefore, there is no basis for considering the alleged disallowance for computing book profit u/s 115JB of the Act in the proceedings carried out u/s 153A/143(3) of the Act. We thus set aside the ld. CIT(A) and delete the impugned addition.

7.

Accordingly ground no. 1 to 4 are allowed.

8.

As far as ground no. 5 is concerned raised against the charging of interest u/s 220(2) of the Act, since the disallowance itself is deleted no interest will be leviable on the alleged addition u/s 220(2) of the Act. Accordingly, ground no. 5 is also allowed.

10.

In the result, the appeal of the assessee is allowed.

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