ITO 8(3)(2), MUMBAI vs. SURAKSHA REALTY LTD, MUMBAI

The aforesaid appeal has been filed by the Revenue against impugned order dated 11/04/2014 passed by the CIT(A)-18, Mumbai in respect of the order of assessment passed u/s 143(3) for the assessment year 2010-11, on the following grounds:- i) “On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition of Rs. 22,91,994/- made u/s 14A r.w. Rule 8D to the Book Profit u/s 115JB holding that disallowance u/s. 14A cannot be considered while computing book profit u/s. 115JB.”

"ii). "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying on the decisions in the case of Essar Teleholdings Ltd. vs. Addl.CIT & Others (ITA Nos.3850/Mum/2010) & Reliance Industrial Infrastructure Ltd vs. Addl,CIT & Others (ITA Nos.69&70/Mum/2009) ignoring the subsequent decision of the Mumbai ITAT in the case of RBK Share Broking (Pvt.) Ltd.(ITA Nos.6678 & 7546 (Mum) of 2011 dated 24.07.2013] wherein it was categorically held by the Hon'ble ITAT that from the A.Y.2008-09 onwards, disallowance u/s.14A is required to be computed as per Rule 8D and further the amount which has been disallowed also needs to be added to the amount of net profit for computing 'book profit' u/s.115JB. iii) On the facts and in the circumstances and in law, the Ld CIT(A) also erred in not appreciating the decision of Mumbai ITAT in the case of M/s. Esquire Pvt. Ltd, (ITA No.5688/Mum/2011 dated 02.07.2012) wherein the Hon'ble Tribunal has held that "in case any amount is disallowed u/s.14A, we make it clear that the amount has also to be disallowed under the provisions of section 115JB.” iv) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have confirmed the addition as the same were based on documentary evidences seized during the course of search in the premises of Shri Mukesh Chokshi who has also confirmed that he had provided accommodation entries." v). "The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the A.O. be restored." vi) "The Appellant craves leave to amend or alter any grounds or add a new ground which may be necessary".

Order pronounced in the open court on 7th January, 2016