TaxTMI 
TaxTMI 
2017 (1) TMI 1153
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....e Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 27.02.2015. 2. The facts of the case qua the assessee are that the assessee filed return of income for A.Y. 2012-13 on 04.02.2013 showing total income of Rs. Nil. Later on, the assessee's case was selected for scrutiny through CASS and Assessing Officer has computed the addition by making the disallowance u/s. 14A of the Act read with Rule 8D of the I. T. Rules, 1962 (hereinafter referred to as the "Rules") at Rs. 53,08,614/-. 3. Aggrieved from the order of the AO, the assessee filed an appeal before the Ld. CIT(A), who has confirmed the addition made by the AO observing the following: For issue u/s. 14A read with Rule 8D of the Rules (ground no. 1 and 2) Fo....
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....d in the P& L Account reflects the net interest and not the gross interest as claimed by the appellant. The AR was given an opportunity during the hearing held on 12.05.2016 to furnish specific details showing interest receipts credited in the P & L Account on 13.05.2016 so as to verify that the net interest paid was as claimed by the appellant. However, no details have been furnished till date to establish that interest receipts of Rs. 29,15,450/- have been credited to the P & L Account. Hence, it is concluded that net interest amounted to Rs. 68,57,787/- only. This amount of Rs. 68,57,787/- has been rightly considered by the AO in computing disallowance under Rule 8D(ii) and no reduction of this figure is warranted on the basis of the mat....
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....for computing book profit u/s. 115JB. For this purpose, the appellant relied upon the two decisions of ITAT. It is seen that the Hon'ble ITAT in its decision in the case of Spark Finwiz Ltd.(Supra) had decided that such an addition could not be made u/s.115JB having regard to the fact that the assessment year concerned(A.Y. 2006-07) in that case was before the "curative" amendment was brought about. It also stated that as disallowance u/s. 14A had been deleted, the question whether the same disallowance could be made u/s.115JB was only academic in nature. On the other hand, the Hon'ble ITAT, Mumbai has held in ITO v RBK Share Broking (P)Ltd.(2013) 60 SOT 61, Godrej consumer Products Ltd. v Addl. CIT(2014) 159 TTJ 21 and Time Technop....
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.... 4. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing." 5. Ground Nos. 1 and 2 relate to disallowance u/s. 14A read with rule 8D(2)(ii) of the I.T.Rules at Rs. 68,57,787/-. 5.1. The Ld. AR for the assessee has submitted that the assessee company under consideration is a non-banking financial company (NBFC) recognized by the RBI norms. The company's main business is taking loan and giving loan, the AO has worked out the disallowance under Rule 8D (2) (ii) by computing proportionate interest paid in relation to exempted income, (dividend received). The Ld. AR for the assessee has stated before us clearly, that the assessee has credited the interest of Rs. 29,15,....
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....he stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated again for the sake of brevity. 5.3. Having heard the rival submissions and perused the material available on record, we are of the view that there is merit in the submission of the assessee, as the proposition canvassed by the Ld. AR for the assessee are supported by the judgment of Hon'ble ITAT, Kolkata, in assessee's own case (supra) and the facts narrated by him above. As the Ld. AR for the assessee has pointed out that net interest is to be taken into account for disallowance purpose, as the assessee company under consideration is a NBFC company which received interest and paid interest during the assessment year under c....
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....lowance made u/s. 14A of the Act cannot be added to the net profit for computing book profit u/s. 115JB of the Act. For this purpose, the assessee relied on following two decisions: (i) ACIT Vs. Spray Engineering Devices Ltd. 53 SOT 70 (Chd.) and (ii) ITA No. 1741/Kol/2011 & 12/Kol/2012 in the case of Spark Finwiz Ltd. dated 19.10.2012. 6.2. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the AO, which we have already noted in earlier para and is not being repeated again for the sake of brevity. 6.3. Having heard rival submissions and perused the material available on record, we are of the view that there is merit in the submission of the assessee as the proposition canvassed....