2016 (7) TMI 1548

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....Tax Act, 1961 (in short 'the Act'). 2. In this appeal Revenue has raised the following Grounds of appeal:- 1. "Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in directing the Assessing Officer to restruct the disallowance u/s. 14A r.w. Rule 8D at Rs. 6,93,26,005/- instead of Rs. 105,83,54,495/-." 2. "Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in directing the AO to delete the addition worked out u/s.14A r.w. Rule 8D of the Act while computing the book profits under section 115JB of the Act relying on the decision of Hon'ble ITAT in the assessee's own base for AY 2006-07 ignoring the fact that the decision has not been acc....

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....essee made varied submissions on facts and in law. Ultimately, the CIT(A) noticed that in the present year, assessee had not received dividend or any other income which was exempt from tax and, therefore, no disallowance could be made in the instant year by invoking section 14A of the Act. So however, the CIT(A) also noticed that since assessee had made suo-motu disallowance of Rs. 6,93,26,005/- under section 14A of the Act in the return of income filed in response to notice under section 153A of the Act, he directed the Assessing Officer to retain such disallowance on the ground that the corresponding expenditure could not be said to be incurred 'wholly and exclusively for the purposes of business'. Against the decision of the CIT(A), Reve....

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....n this aspect. In any case, so far as the decision of the CIT(A) in retaining the suo-motu disallowance made by the assessee is concerned, the same is not an issue before us. Thus, we hereby affirm the order of the CIT(A) on the aspect agitated by the Revenue. As a consequence, Revenue fails in Ground of appeal No.1. 7. In so far as the second Ground is concerned, the same relates to computation of 'book profit' in terms of section 115JB of the Act. The Assessing Officer, while computing book profit under section 115JB, added the amount of disallowance computed under section 14A of the Act. The assessee contended before the Assessing Officer that there was no justification for taking into consideration the disallowance under section 14A ....