AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (10) TMI 1215
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..../s 115JB of the Income Tax Act, 1961 (the Act) at ₹ 8,97,48,777/- vide order dtd. 29-12-2009 passed u/s 143(3) of the Act. On appeal, the ld. CIT(A) partly allowed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the Revenue and the assessee both are in appeal before us. ITA No. 4567/Mum/2011 (By Revenue) 4. Ground No. is against the part relief allowed by the ld. CIT(A) in respect of disallowance u/s 14A of the Act. 5. Brief facts of the above issue are that the A.O. observed that the assessee had made investment in shares and also carried out trading in shares on which dividend income of ₹ 12,02,765/- has been earned which was claimed exempt u/s 10(34) of the Act. The A.O. further observed that an expenditure of ₹ 1,13,676/- has been allocated against such exempt income. The A.O. further observed that the company cannot earn dividend without its existence and management. He further observed that investment decisions are very complex in nature and require substantial market research, day-to-day analysis or market trends and decisions with regard to acquisition, retention and sale of shares at the most appropriate time and hence not correct to....
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....u/s 14A should be restricted to ₹ 31,69,778/-. 6. At the time of hearing the ld. D.R. while relying on the order of the A.O. submits that he has no objection if the issue is set aside to the file of the A.O. in the light of the decision of Hon'ble jurisdictional High Court in the case of Godrej and Boyce Mfg. Co. Ltd. (supra). 7. On the other hand the ld. counsel for the assessee, at the outset, submits that the assessee has suo motu disallowed the expenditure of ₹ 1,13,676/- against the exempt income. He further submits that in view of the ratio of the decision in Godrej and Boyce Mfg. Co. Ltd. (supra) the assessee has worked out the disallowance of ₹ 31,69,778/- as appearing at para 4.3 of the appellate order and the ld. CIT(A) after considering has accepted the same. He, therefore, submits that the order passed by the ld. CIT(A) does not call for any interference. 8. We have carefully considered the submission of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that following the decision of Godrej and Boyce Mfg. Co. Ltd. (supra) some disallowance is called for ....
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..... The ld. CIT(A) while deleting the part of the disallowance on the ground that the said amount was paid before the due date of filing of return, observed in respect of other disallowance that service tax had not become payable, 43B is not applicable and hence he deleted the entire disallowance of ₹ 90,08,661/-. 11. At the time of hearing the ld. D.R. supports the order of the A.O. 12. On the other hand the ld. counsel for the assessee while relying on the order of the ld. CIT(A) submits that the assessee has not debited the amount of service tax in its P&L account. He further submits that since the assessee has paid a sum of ₹ 41,97,663/- before the due date of filing of return, therefore, the said amount cannot be disallowed. With regard to other disallowance of ₹ 48,10,998/- he submits that the service tax cannot be said to be payable and, therefore, the provisions of section 43B could not be invoked and in support the reliance was also placed in Pharma Search v. ACIT (2012) 53 SOT 1 (Mum.), ACIT vs. Real Image Media Technologies P. Ltd. (2008) 306 ITR (AT) 106 (Chennai) and Goetze (India) Ltd. vs. CIT (2009) 32 SOT 101 (Delhi). 13. We have carefully cons....
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....echnical support services provided by IL & FS Infotech Ltd. and IL & FS Financial Services Ltd., and hence such expenditure being revenue in nature incurred for the purposes of business is allowable and in support copy of invoices were also filed. The ld. CIT(A) after considering the same deleted the disallowance made by the A.O. 17. At the time of hearing the ld. D.R. supports the order of the A.O. 18. On the other hand the ld. counsel for the assessee relied on the order of the ld. CIT(A). 19. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that before the A.O. it was submitted by the assessee that the assessee has made payment for maintenance of software and technical support services provided by the above two companies and in support, the assessee has also filed purchase details of software expenses along with name and address, amount and TDS deducted etc. However, the A.O. without considering the same has treated the software expenditure as capital in nature and after allowing the depreciation @ 60% made the disallowance of ͅ....
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....come exempt u/s 10 can be added. The assessee had not earned any exempt income as evident from P&L account. It was further contended that the disallowance u/s 14A made while computing profit u/s 28 was on a different footing from computing book profit u/s 115JB as the wordings of both sections are different, hence, the addition u/s 14A while working out book profit is not correct. The ld. CIT(A) after considering the assessee's submission directed the A.O. to restrict addition to the disallowance u/s 14A i.e ₹ 31,69,778/-. 24. At the time of hearing the ld. D.R. submits that the ld. CIT(A) was not justified in directing the A.O. restrict the disallowance to ₹ 31,69,778/- for the purpose of computing of book profit u/s 115JB of the Act. He further submits that in view of the plea taken in ground No. 1 of the Revenue's appeal , the issue may be set aside to the file of the A.O. 25. On the other hand, the ld. counsel for the assessee while reiterating the same submission as submitted before the ld. CIT(A) further submits that the provision of section 14A cannot be imported into while computing the book profit u/s 115JB of the Act inasmuch as clause (f) of Explanation t....