AI Drafter 
TaxTMI 
TaxTMI 
2018 (12) TMI 1828
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....the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law by deleting the disallowance of Rs. 49,66,000/- of the assessee without considering the provision of Section 14A read with Rule 8D and the relevant Circular No. 5/2014. 4. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the disallowance of Rs. 51,22,210/- u/s 14A of the I.T. Act in computation of book profit u/s 115JB. 5. For that the appellant craves for leave to add, delete, amend or modify any grounds before or at the time of appellate proceedings. 3. Ground No. 1 relates to disallowance of Rural Employment Cess (RE Cess) and Primary Education Cess (PE Cess) aggregating to Rs. 49,99,13,357/-. 4. When this appeal was called out for hearing, learned counsel for the assessee invited our attention to the order dated 30.11.2015 in ITA No. 1146/Kol/2012, for assessment year 2008-09, whereby the issue relating to PE Cess and RE Cess have been discussed and adjudicated. The learned counsel for the assessee submitted that the present appeal is squarely covered by the aforesaid order of the Tribunal, a copy of which was also placed ....
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.... have been duly remitted in the succeeding year in accordance with the provisions of the West Bengal Rural Employment and Production Act,1976 and the West Bengal Primary Education Act, 1973 and was also satisfied with the manner of treatment of the same by the assessee for tax purposes. Having done so, there is no good reason for the Revenue to shift its stand in the assessment Year under appeal. To this extent, the decisions of the Hon`ble Apex court (supra) are relevant to the facts of the instant case. In view of the aforesaid facts and circumstances and in the view of judicial precedents relied upon hereinabove, we hold that the cess collected from customers in the sale invoices shall not be chargeable to tax in the year of collection and accordingly, the grounds raised by the assessee in this regard are allowed." As the issue is squarely covered in favour of the assessee by the decision of the Division Bench of this Tribunal in assessee's own case and there is no change in facts and law and the revenue is unable to produce any material to controvert the aforesaid findings of the Division Bench. We find no reason to interfere in the said order of the ld CIT(A)....
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....n computing disallowance under Rule 8D of the Rules on presuming the average value of investment at ½ % of the total value. In view of the above and respectfully following the coordinate bench decision in the case of JK Investors (Bombay) Ltd., supra, we uphold the order of CIT (A)". CIT vs R.E.I. Agro Ltd. in GA 3022 of 2013 in ITAT 161 of 2013 dated 23.12.2013 rendered by Calcutta High Court "The Assessing Officer also disallowed the expenditure under section 14A of the Income Tax Act, 1961 without first recording that he was not satisfied with the correctness of the claim as regards the claim that "no expenditure" was made by the assessee. Challenging the order of the tribunal, the present appeal has been filed. We have heard Mr. Bhowmik and are of the opinion that no point of law has been raised. Therefore, this appeal is dismissed". The aforesaid two decisions of the Jurisdictional High Court are binding on this tribunal and hence the case laws addressed by the Learned CITA in his order are not considered in this order. We also find that one of the decisions relied upon by the learned CITA is that of Jurisdictional High Court in the c....
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....e by the Learned AO. 2.6.3. We also find that the investments that did not yield any dividend income needs to be excluded from the computation of disallowance-, if any, u/s 14A of the Act read with Rule 8D of the Rules 'as the basic intention behind introduction of section 14A itself is only to disallow the expenditure incurred for earning an income which does not form part of the total income. When there is no income which is claimed as exempt, then there is no scope for provisions of section 14A to operate. In the instant case, the assessee derived dividend income which is exempt only from CESC Ltd and from UTI Mutual Fund (which was purchased and sold during the year itself). Hence even assuming if disallowance is to be made U/S 14A read with Rule 8D, the investments which did not yield any dividend income during the year has to be excluded. We agree with the arguments of the Learned AR in this regard. Reliance in this regard is placed on the following decisions:- * Alliance Infrastructure Projects Pvt. Ltd. vs. DCIT in I.T.A. No. 220 & 1043 (BNG)/2013 for asst years 2009-10 & 2010-11 dated 12.09.2014 (Bangalore Bench) * CIT vs. Corrtech Energy Pvt....
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....at whether the disallowance u/s 14A of the Act could be made to the book profits computed u/s 115JB of the Act. The assessee has raised the following ground before us: '1(d) That the finding recorded by the learned CIT(Appeals) in the appellate order while confirming the action of the Assessing Officer in making the impugned further disallowance of expenditure amounting to INR 44,91468/- u/s.14A of the Act read with Rule 8D of the Income-tax Rules, 1962 is based merely on conjecture, surmise and presumptions." 3.1. The Learned AR argued that Rule 8D is meant only for computation of income under normal provisions of the Act and not for book profit u/s115JB of the Act. The Learned DR argued that the disallowance u/s l4A of the Act would automatically fall in clause (f) of the Explanation to section 115JB of the Act and hence needs to be added back for computation of book profits u/s I l5JB of the Act 3.2. We have heard the rival submissions. We find lot of force in the argument of the Learned AR that computation of disallowance under Rule 8D can be used only for computation of income under normal provisions of the Act and not for book profits u/s 115JB of t....