Appeal partly allowed, key on Supreme Court decision, adherence to Special Bench ruling

The Tribunal partly allowed the appellant's appeal, emphasizing the importance of awaiting the Supreme Court's decision for potential rectification and adhering to the Special Bench's decision on adjustments in book profit under section 115JB. The disallowance under section 36(1)(va) for late payment of employee's provident fund contribution was upheld, citing the Gujarat State Road Transport Corporation Ltd. case. However, the addition under section 115JB for computing book profit based on a disallowance under section 14A was rejected, following the ACIT Vs. Vireet Investments case, directing the AO not to adjust book profit for MAT liability based on Rule 8D calculations.

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Issues:
1. Disallowance under section 36(1)(va) of the Act for late payment of employee's contribution to provident fund account.
2. Addition made under section 115JB of the Act while computing book profit due to disallowance under section 14A of the Act.

Issue 1: Disallowance under section 36(1)(va) of the Act:
The appellant contested the disallowance of Rs. 61,728 under section 36(1)(va) by the ld.CIT(A) for late payment of employee's provident fund contribution. The appellant referred to the judgment of Hon'ble Gujarat High Court in a similar case and highlighted the possibility of the decision being overturned by the Hon'ble Supreme Court. The ITAT, Ahmedabad Bench had consistently ruled in favor of the Revenue on this issue based on the Gujarat State Road Transport Corporation Ltd. case. However, the appellant cited a recent judgment in the Salasar Laminates Ltd. case where liberty was granted to the assessee pending the outcome of the Supreme Court decision. The Tribunal noted that if the High Court's decision is reversed by the Supreme Court, the Tribunal's order would be flawed. The Tribunal rejected the appeal, stating that the appellant could seek rectification under section 254(2) if needed after the Supreme Court's decision.

Issue 2: Addition under section 115JB of the Act:
The appellant challenged the addition of Rs. 9,34,945 made by the AO under section 115JB for computing book profit, which was based on a disallowance under section 14A. The AO's action was upheld by the ld.CIT(A) but restricted to Rs. 9,34,945. The appellant relied on the Special Bench decision in the ACIT Vs. Vireet Investments case, arguing that no adjustment could be made in book profit under section 115JB due to disallowances under section 14A. The Tribunal referred to the Special Bench's question on whether expenses for earning exempt income under section 14A should impact book profit under section 115JB. Following the Special Bench's decision, the Tribunal allowed the appeal, directing the AO not to adjust book profit for MAT liability based on Rule 8D calculations.

In conclusion, the Tribunal partly allowed the appellant's appeal, emphasizing the importance of awaiting the Supreme Court's decision for potential rectification and adhering to the Special Bench's decision on adjustments in book profit under section 115JB.

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