TaxTMI 
TaxTMI 
2016 (10) TMI 393
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....nd referred to the Act) read with Rule 8D of the Income Tax Rules, 1962(hereinafter called and referred to as the Rules) to Rs. 7,59,39,128/- by CIT(A) by rejecting the disallowance u/s 14A of Rs. 894,26,131/- made by the AO. In the ground no.2, the issue raised is the deletion the addition made by the AO u/s 14A for the purpose of computing book profit u/s 115JB of the Act. In the third ground the revenue raised the issue of charging of interest u/s 234B of the Act. 3. Brief facts of the case are that the assessee filed its return of income on 21.11.2006 declaring total income at Rs. 7,76,71,388/- after claiming deduction under section 80IA to the tune of Rs. 1,00,84,71,662/-. The original assessment was completed under section 143(3) o....
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....e AO u/s 14A of the Act and charging of interest u/s 234B consequent to inclusions of various items. The ld. CIT(A) partly allowed the appeal of the assessee by sustaining the addition to the tune of Rs. 7,59,39,128/- as made u/s 14A by observing and holding as under : "7.2 The facts of case and submission made by appellant have been considered. There is no dispute in view of decision of Hon'ble Bombay High Court and ITAT, that disallowance u/s 14A cannot be computed following Rule 8D for current assessment year. However, both High Court and ITAT have directed, that disallowance should be made on some reasonable basis. It is the argument of appellant that disallowance offered by it in the return, though made on adhoc bas....
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....ive expenses (Rs.3 Lakh per month) 36,00,000 Total disallowance 7,59,39,128 7.4 The disallowance u/ s 14A for the year is therefore confirmed to the extent of Rs. 7,59,39,128/ -. The ground of appeal is decided accordingly as partly allowed." 4. We have carefully considered the submissions of the parties, perused the material placed before us including the orders of authorities below. We find that the ld. CIT(A) has passed the order after taking into account the complete matter and reduced the disallowance to Rs. 759,39,128/-. We are in agreement with the ld.CIT(A) that the rule 8D is not applicable in the current assessment year as the same is effective from the assessment year 2008-09 and reasonable b....
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.... ,1956 and has been approved by the registrar of companies, the assessing officer does not have much scope to tinker with the accounts. Since the assessee has not debited any actual expenditure relating to the earning of exempt income, therefore, the provisions section 14A, cannot be imported into computation of book profit u/s.115JB. Even clause (j) of explanation to section 115J8 refers to those amounts which are debited to the profit and loss account, can be added to book profit. This issue has already been decided by co-ordinate bench of tribunal in the case of M/s. Essar Teleholdings Limited vs. DCIT (ITA No.3850/Mum/2010) and in the case of of M/s. Quippo Telecom Infrastructure Ltd.Vs. ACIT (ITA No.4931/Del/2010) order dated is 18th F....
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.... The next issue raised in the ground no.3 is that the ld.CIT(A) was wrong in holding not interest u/s 234B can be levied for inclusion of various items for computing profit under section 115JB of the Act. 8. We have carefully considered the rival submissions on this issue. From the order of FAA we find that the ld. CIT(A) held that while computing the disallowance made to the book profit u/s 115JB of the Act the interest u/s 234B was not be charged. The FAA has passed the order by following the decision of the co-ordinate bench of the Tribunal in assessees own case by observing as under : "11.1 The ground of appeal is directed against charging of interest u/s 234B in respect of additions u/s 115JB due to retrospective ame....
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....t of advance tax which has to be paid as per the law then prevailing. Thus, ground no.3, raised by the assessee is allowed." Hence, in view of the above facts of the case and the position of the law as was held by the Calcutta High Court in Emami Ltd vs CIT 337 ITR 470, decision of which would be binding on the lower authorities, we submit that the interest charged u/s.234B of the Income Tax Act' 1961 may kindly be reworked based on the directions of the Hon'ble ITAT, wherein it has been held that the Assessee cannot be treated as defaulter of tax on account of a retrospective amendment in the Act which was not known to it at the time of payment of the Advance Tax installment which has otherwise been duly paid as per the l....