2012 (3) TMI 29

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.... Revenue: "1. Whether on the facts and circumstances of the case and in law the ld CIT(A) was justified in deleting the addition of Rs 43,93,130/- made by AO as per provisions of section 14A of the Act, on account of administrative expenses incurred for earning exempt income? 2. Whether on the facts and circumstances of the case, and in law the ld CIT(A) was justified in holding that the payment of technical knowhow of Rs 40,20,546/- is revenue in nature? 3. Whether on the facts and circumstances of the case, and in law the ld CIT(A) was justified in holding that the provisions of section 115JB do not permit any adjustment to the book profits in respect of provision for leave encashment which is an unascertained and contingent liability?....

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....ed as exempt under section 10(15) of the Act. The Assessing Officer invoking the provisions of section 14A of the Act, disallowed a sum of Rs 43,93,130/- as proportionate administrative and other expenses which, according to him, were incurred by the assessee for earning such exempt income. This action of the Assessing Officer was in line with his stand in the earlier years in the case of the assessee. The Commissioner of Income-tax (Appeals) noted that the disallowance under this head had been restricted to Rs 1,00,000/- by the Commissioner of Income-tax (Appeals) in the earlier years and as per him, since there was no change in the facts of the case in the current year also, the disallowance was restricted to Rs 1,00,000/-. On this aspect....

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....owed by the Tribunal in the assessee's own case for the assessment years 2004-05 and 2005-06 in its consolidated order dated 30.6.2011 (supra). Following the aforesaid precedent, since the issue involved in this year is similar and stands on identical footing, we therefore affirm the action of the Commissioner of Income-tax (Appeals). Accordingly, Ground No. 2 raised by the Revenue is dismissed. 8. In so far as Ground No. 3 is concerned, the same relates to an adjustment made by the Assessing Officer for ascertaining the book profit in terms of section 115JB of the Act. The Assessing Officer adjusted the book profit with a sum of Rs 48,69,358/- on account of Provision for leave encashment. The Commissioner of Income-tax (Appeals) dis-agree....