TaxTMI 
TaxTMI 
2017 (9) TMI 1219
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....letion/restricting the disallowance u/s 14A r.w. Rule 8D(2)(ii)/(iii) of the Act while computing the income under normal provisions of the Act. In all these three Assessment Years the Assessing Officer computed the disallowance u/s 14A r.w. Rule 8D of the Act as under: - Assessment Year Disallowance u/s 14A r.w. Rule 8D2(i) Disallowance u/s 14A r.w. Rule 8D2(ii) Disallowance u/s 14A r.w. Rule 8D2(iii) Dividend income earned 2008-09 -Nil- 1,22,47,472 12,16,787 9,62,500 2009-10 -Nil- 1,64,73,251 19,02,859 8,75,200 2010-11 -Nil- 2,50,17,377 20,12,296 5,50,000 3. The assessee preferred appeals before the Ld.CIT(A) contending that the investments were made out of surplus own funds wh....
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....this chart the Learned Counsel for the assessee submits that own funds of the assessee for the Assessment Years 2008-09, 2009-10 and 2010-11 in the form of share capital and reserves stood at Rs..262.02 crores, Rs..219.76 crores and Rs..237.29 crores and whereas the investments in domestic companies capable of generating tax free income stood at Rs.31.08 crores, Rs..31.88 crores and Rs..32.49 crores and the percentage of investments out of own funds stood at 12%, 15% and 14% respectively. Therefore, Learned Counsel for the assessee submits that since own funds are much more than the investments made there should not be any disallowance u/s 14A r.w. Rule 8D(2)(ii) in view of the decision of the Hon'ble Jurisdictional High Court in the ca....
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....not justified in deleting the adjustment made to book profit u/s 115JB of the Act on account of expenses relatable to exempt income u/s 14A r.w. Rule 8D of the I.T. Rules. 9. This issue now stands squarely covered by the decision of the Special Bench Delhi in the case of ACIT v. Vireet Investments Private Limited [165 ITD 27] wherein the Special Bench held that the computation under clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules. Thus, respectfully following the said decision we restore this issue to the file of the Assessing Officer who shall compute the book profit u/s 115JB following the decision of the Special Bench. This Ground is p....
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.... the assessee is only a contingent liability, it is an unascertained liability. He further submits that assessee himself treated this provision as not allowable while computing the normal provisions of the Act. Therefore, this shows that it is only an unascertained liability and the Ld.CIT(A) is not justified in deleting the adjustment made by the Assessing Officer to the book profit. 14. The Learned Counsel for the assessee before us vehemently supported the orders of the Ld.CIT(A) and further placed reliance on the following decisions: - (1) M/S. Rotork Controla India (P) Ltd v. CIT [314 ITR 62 (SC)] (2) CIT v. Becton Dickinson India (Purchase) Ltd. [(2013) 29 taxmann.com 80 (Delhi)] (3) Anchor Electricals (P....
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.... the Act in the case of provision for warranty expenses as the same constitute an ascertain liability. Reliance was also placed on the decision of the Bangalore Bench of the Tribunal in the case of IBM India Ltd. v. CIT(A) [105 ITD 1] wherein it was held that the liability towards warranty is inbuilt in the sale prices itself and so the liability is not contingent but an ascertained one and to be allowed in the year of sales. In the case of CIT v. Jay Bee Industries [71 Taxmann 386] the Hon'ble Punjab and Haryana High Court held that provision of warranty for repairs/replacement is an existing liability at time of sale and is allowable as deduction. Mumbai Bench of the Tribunal in the case of Indian Oil Tanking Ltd. v. ITO [120 ITD 237]....