Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
The captioned appeal is preferred by the assessee and is directed against the impugned order dated 17/06/2014 of CIT(A)-22, Mumbai, pertaining to the assessment year 2010-11, which in turn has arisen from an order passed by the Assessing Officer dated 30/01/2013 under section 143(3) (ii) of the Income Tax Act, 1961( in short “the Act”).
In this appeal, the only issue raised by the assessee is against the action of the income tax authorities in adding back a sum of (Assessment Year : 2010-11) Rs.8,18,309/- while computing book profit under section 115JB of the Act on account of amount disallowable under section 14A of the Act.
Before me, the Ld. Representative for the assessee vehemently pointed out that for computing income under the normal provisions, section 14A of the Act is applicable in disallowing the expenditure relatable to the income which does not form part of the total income under the Act and that the same is not to be understood as such for the purposes of computing profit under section 115JB of the Act also. According to the Ld. Representative for the assessee, the disallowance computed under section 14A of the Act cannot be automatically applied for computing the ‘book profit’ under section 115JB of the Act. According to him, in the present case, the Assessing Officer has mechanically applied the computation of disallowance under section 14A of the Act done in the manner prescribed in rule 8D of the Income Tax Rules, 1962( the ‘the Rules’), for the purpose of computing book profit under section 115JB of the Act.
On the other hand, Ld. Departmental Representative has relied upon the orders of the authorities below.
In this context, it is noticed that the CIT(Appeals) has referred to the decision of the Mumbai Bench of the Tribunal in the case of M/s. R.K.Share Broking Pvt. Ltd, dated 24/07/2013 to uphold the computation of ‘book profit’ under section 115JB of the Act after taking into consideration the disallowance under section 14A of the Act computed in terms of rule 8D of the Rules.
(Assessment Year : 2010-11) 5. Ostensibly, it has not been shown before me that the decision of the Mumbai Bench of the Tribunal in the case of M/s. R.K.Share Broking Pvt. Ltd, (supra), relied upon by the CIT(Appeals) has been altered by any higher authority. Thus, the said decision continues to hold the field and accordingly, no fault can be found in the decision of the CIT(Appeals). Apart therefrom, it is noticeable that clause(f) of Explanation (1) below section 115JB(2) of the Act permits, inter-alia, enhancement of the ‘book profit’ shown in the Profit and Loss account by an amount or amounts of expenditure relatable to any income to which section 10 of the of the Act applies. In the present case, the Assessing Officer has noted that assessee had earned dividend income which was claimed exempt under section 10(33) of the Act and further noted that the assessee had already disallowed a sum of Rs.8,18,309/- in terms of section 14A of the Act in the computation of income under the normal provisions. Therefore, the Assessing Officer picked up the same amount of disallowance and made the adjustment to the stated ‘book profit’ on the strength of clause(f) to Explanation (1) below section 115JB(2) of the Act. In view of the aforesaid facts, in my view, the assessee is not justified in asserting that the amount added by the Assessing Officer in computing the ‘book profit’ under section 115JB of the Act has been done in a mechanical manner. Thus, on this aspect the assessee fails.
In the result, the appeal of the assessee is dismissed.