2019 (2) TMI 1897

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....ng income at Rs. 9,88,080/- under normal provisions and book profits of Rs. 32,42,406/- u/s 115JB of the Act. The case was selected for scrutiny under CASS and accordingly details were called for and the assessee submitted the details. On perusal of the same, the A.O. observed that the assessee-company earned dividend income and income from units of mutual funds aggregating to Rs. 35,13,314/- which is exempt from tax as per the provisions of section 10 of the IT Act, 1961. Therefore, the assessee was asked as to why the disallowance u/s 14A r.w.s 8D was not made. The assessee submitted that the investment in shares and Mutual Funds was not made out of borrowed funds and that there was no direct expenditure attributable to earning of dividen....

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....investments. 5. The Ld. CIT(A) has erred in law in sustaining the finding of the A.O. that the disallowable amount under section 14A is to be added for the purpose of computing the book profits u/s 115JB of the Act. 6. For these and any other Grounds that may be raised at / before the time of hearing, total income is prayed that the disallowance made by the A.O. and upheld by the Ld. CIT(A) be kindly deleted." 3. Learned Counsel for the Assessee has drawn our attention to Grounds No. 4 to 6 of the grounds of appeal and submitted that they have not been raised before the CIT(A) and therefore, it is prayed that they may be admitted as additional grounds of appeal. The assessee also filed the following additional grounds o....

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....legal in nature, Hon'ble Bench has the power and discretion to admit it for consideration in terms of the judgment of Supreme Court in the case of NTPC Ltd (229 ITR 323) 9. It is prayed that the Additional Ground of appeal be kindly admitted for consideration and adjudication." 4. These grounds being legal grounds, they are admitted and adjudicated as under:- 5. Learned Counsel for the Assessee briefly narrated the facts of the case and reiterated the submissions made before the Authorities below. He relied upon the decision of the Coordinate Bench "B" (SMC) of this Tribunal in the case of Sri Kode Finvest Private Limited vs. ITO (ITA No. 237/Hyd/2016) dated 28/03/2018 wherein the Tribunal has held that the disallowance under....