TaxTMI 
TaxTMI 
2016 (3) TMI 211
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....d outdoor games, sports, health club, Bars and restaurants banquet hall for its member apart from the business of export of precious stones, filed its return of income for the assessment year 2010-2011 declaring the total income of Rs. 4,33,37,260/-. The return was processed and assessment order was accordingly passed. The assessee had suo moto made disallowance of Rs. 6,07,845/- u/s 14A of the Income Tax Act, 1961( in short the Act) read with Rule 8D of the Income Tax Rules, instead of Rs. 65,76,251/- as expenditure disallowable under section 10 of the Act (pro rata for dividend income). The AO added Rs. 65,76,251/- to the income of the assessee holding that there is no provisions u/s 115JB of the Act, The expenditure disallowed u/s 14A re....
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....(A), the revenue has preferred the present appeal on the following defective grounds:-. "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 65,76,251/- u/s 14A of the Act by the Assessing Officer to the Assessing Officer to the assessee's book profit and instead upholding the addition of Rs. 6,07,845/- made by the assessee to its book profit on account of disallowance u/s 14A of the Act, without considering the fact that the assessee had itself computed disallowance of Rs. 65,76,251/- u/s 14A read with Rule 8D and offered the same for tax in its computation of total income. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erre....
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....ook Profit u/s 115JB was higher than the tax computed on the normal income, the return of income was filed declaring the Book Profit computed under section 155JB at Rs. 9,53,78,463/- as deemed total income. 6. The Ld. AR further contended that, as per sub-clause (ii) below the Explanation [1] to section 115JB the dividend of Rs. 92,41,515/- was not required to be included in book profit. However, the assessee is entitled for deduction of an amount Rs. 44,96,864/- incurred as Portfolio Management Services (PMS) fees and Rs. 3,95,101/- incurred as depository charges as the entire investment transaction had been carried out through PMS for earning Short term Capital gain of Rs. 56,62,674/- and Long term capital gain of Rs. 6,52,06,426/-. Th....
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....- therefore, the assessee has calculated the amount of addition proportionate to the dividend amount. On the other hand the AO has made addition of the entire amount i.e., Rs. 65,76,251/- calculated by the assessee himself u/s 14A of the Act r/w Rule 8D. 9. The aforesaid facts give rise to a question that whether in the present case addition of disallowance calculated by the AO is justified or the proportionate amount calculated by the assessee needs to be added to the book profit? 10. Section 14A of the Act bars allowance of any expenditure for earning income which does not constitute total income of the assessee and the expenses incurred can be allowed only to the extent the same are relatable to earning of taxable income. Hence, on....