TaxTMI 
TaxTMI 
2020 (4) TMI 251
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....diture for earning tax free income. Ld. CIT (A) ought to have considered submission of appellant and delete the disallowance. It be so held now. 2. Ld. CIT (A) erred in law and on facts in confirming action of AO to increase book profit u/s 115JB of the Act by disallowance of Rs, 8,04,294/- u/s 14A of the Act. Ld. CIT (A) ought to have deleted same considering various judicial pronouncement. It be so held now. 3. Levy of interest u/s 234A, 234B & 234D of the Act is unjustified. 4. Initiation of penalty proceedings u/s 271(1 )(c) of the Act is unjustified. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. The 1st issue raised by the assessee is that the Ld.CIT (A) erred in making the disallowance of Rs. 8,04,294/- under section 14A of the Act read with rule 8D(2)(iii) of Income Tax Rule. 2. Briefly stated facts are that the assessee is a limited company and engaged in the activity of manufacturing & trading of machinery, machinery parts, and drink Concentrates. The assessee in the year under consideration has received dividen....
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.... is issue in the assessee's appeal, is restored to the file of the AO for recomputation in line with the direction given above. No disallowance under section 14A read with rule 8D(2)(i) and (ii) can be made in this case." 6.1 We have also considered a similar judgment of Special Bench of Hon'ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxmann.com 415; passed recently wherein it was held that the disallowances u/s 14A of the Act read with rule 8D of Income Tax Rules for the administrative expenses will be determined considering only those investments which yielded exempt income during the year. 6.2 In view of the above, we direct the Assessing Officer to compute the disallowance as per Rule 8D by taking into consideration only those shares/investments, which have yielded exempted income in the year under consideration. Hence the ground of appeal of the assessee is partly allowed. The second issue raised by the assessee in ground no. 2 is that the Ld. CIT(A) erred in making the addition of the disallowances made u/s 14A of the Act while computing book profit u/s 115JB of the Act. 7. The AO during the assessment proceedings was....
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....eeds to be made as per Clause (f) to Section 115JB of the Act independently. The judgment of Hon'ble Gujarat High Court relied on by the Ld AR in the case of Alembic Ltd. (supra), does not restrict the disallowance provided under clause (f) u/s 115JB of the Act. 11.4 Thus it is clear that the disallowance needs to be made in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. In holding so, we draw our support from the judgment of Hon'ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. in GO No.1501 of 2014 (ITAT No.47 of 2014) dated 19.11.14 wherein it was held that the disallowance about exempted income needs to be made as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. The relevant extract of the judgment is reproduced below:- "We find computation of the amount of expenditure relatable to exempted income of the assessee must be made since the assessee has not claimed such expenditure to be Nil. Such computation must be made by applying clause (f) of Explanation 1 under section 115JB of the Act. We remand the matter for such computation to be made by the learned Tribun....
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....g the additions made by the AO on account of liquidated damages amounting to Rs. 10,21,707/-, without properly appreciating the facts of the case and the material brought on record. 1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made u/s.40(a)(i) of the Act of Rs. 23,28,587/-, without properly appreciating the facts of the case and the material brought on record. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 12. At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities being AO and Ld. CIT(A) concerned, a query was raised by the Bench as to applicability and maintainability of the appeal filed by the Revenue in view of recent CBDT Circular No.3/2018 dated 11.7.2018 restricting the filing of the appeal by the Revenue where the tax effect is....