TaxTMI 
TaxTMI 
2016 (12) TMI 122
X X X X Extracts X X X X
X X X X Extracts X X X X
....tances of the case and in law the Hon'ble ITAT is correct in upholding the order of CIT (Appeals)- 2, Ludhiana in deleting disallowance u/s 14A of the I.T. Act? (ii) Whether on the facts and in the circumstances of the case and in law (a) The Hon'ble ITAT is correct in granting relief to the assessee on the basis of its own order in the case of M/s Nahar Capital & Financial Services, Ludhiana vide in ITA No. 1353/CHD/2012 and ITA No. 1120/Chd/2011 without appreciating that in the case of M/s Nahar Capital & Financial Services, Ludhiana, the AO had made an addition under clause (f) of explanation 1 below section 115JB whereas in the case of assessee the assessing officer has not disturbed book profits. (b) In view of the above Hon'b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtant to note that the assessee had itself challenged the computation of disallowance under Section 14A on various grounds. The CIT (Appeals), inter alia, held as under:- "3. Grounds No. 1 to 3:- These grounds are against disallowance of Rs. 1,03,46,099/- u/s 14A read with rule 8D. 3.3 I have carefully considered the appellant's submissions. The facts which need to be noted are that the appellant filed its return of income on 29.10.2007 declaring loss of Rs. 9,75,28,257/- and book profits u/s 115JB at Rs. 28,87,00,981/-. The assessment u/s 143(3) was made on an income of Rs. 1,03,46,099/- and since the tax payable u/s 115JB exceeded the tax on regular income hence book profits of Rs. 28,87,00,981/- were assessed to tax. The issue whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ittedly, for the purpose of Section 115JB, the book profits assessed by the assessee were accepted and the assessee was brought to tax accordingly. The CIT (Appeals), therefore, wrongly observed that the issue which required consideration is whether the provisions of Section 14A are applicable for determining the book profits under Section 115JB. In view of what we have just said this issue does not arise. The last but one sentence in paragraph 3.3 quoted above would cause difficulties in future. The CIT (Appeals) observed that the disallowance under Section 14A read with Rule 8D for computing book profit under Section 115JB was deleted. While it is possible to restrict this observation for the purpose of Section 115JB alone, it is also pos....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tribunal in the case of M/s Nahar Capital & Financial Services for the purpose of deleting the addition. However, it remains a fact that since higher income is assessed by the Assessing Officer under section 115JB of the Act at Rs. 28.87 Cr for the purpose of tax, therefore, the assessee as well as revenue should not have any grievance on the addition made of Rs. 1.03 Cr. which is as per assessment order and since the tax payable under section 115JB of the Act exceeds the tax on regular income, therefore, Assessing Officer correctly accepted the book profit of Rs. 28.87 Cr and correctly assessed the same income for the purpose of tax. The departmental appeal, thus has no merit and is accordingly dismissed." 8. The Tribunal has gone a st....