TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 1216
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....f assessment proceedings, the AO noted that the assessee has claimed the following income as exempt:- S. No. Particulars Amount ( □) 1. Interest on tax free Public Sector bonds exempt under section 10 (15) (iv) (h) of the Act 4,59,58,525/- 2. Dividend exempt u/s 10(34) of the income tax Act, 1961 2,04,22,38,227/- Total 2,08,81,96,752/- 4. Since the assessee has not added back disallowance u/s 14A in the computation of total income, the AO asked the assessee to explain as to why disallowance under section 14A r.w. Rule 8D should not be made. Rejecting the various explanations given by the assessee and relying on various decisions, the AO worked out the disallowance u/s 14A r.w.r. 8D of the IT Act at Rs. 25,85,81,755/- which was added to the total income of the assessee. 5. In appeal, the ld. CIT(A) deleted the addition made by the AO u/s 14A r.w.r. 8D of the IT Act, 1961. 6. Aggrieved with such order of the CIT(A), the Revenue is in appeal before the Tribunal. 7. The ld. DR heavily relied on the order of the AO. He submitted that there cannot be two different views that section 44 is not applicable and section 14A is also not applicable. 8. The ld....
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....tion shall be allowed in respect of expenditure incurred....." The chapter in question is chapter IV. This chapter also contains the provisions relating to computation of profits and gains of business or profession. Section 44 specifically excludes the provisions of the Act relating to computation of income, inter alia, those contained in "Section 28 to 43B". Thus, the exclusion would take within its sweep-section 14A which is an exemption for deductions as allowable under the Act, as provided under section 28 to 43B. Further, section 44 is a special provision applicable in the cases of insurance companies and applies, notwithstanding anything to the contrary contained in the provisions of the Income-tax Act relating to the computation of income chargeable under different heads. For computing the profits and gains of the business of insurance company, the AO had to resort to section 44 and the prescribed rules, and could not have applied section 28 to 43B, since the same were excluded from the purview of section 44. This necessarily includes the exception provision enshrined under section 14A of the Act. Therefore, in our view, the AO could not have travelled beyond section 44 in t....
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....find any infirmity in the order of the CIT(A) on this issue. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee's own case. We find, the Tribunal, vide ITA No.485/Del/2016, order dated 25th February, 2015 for A.Y. 2011-12, has dismissed the appeal filed by the Revenue wherein the CIT(A) had deleted 50% of disallowance on account of guest houses by observing as under:- "10. The ld. CIT (A) deleted 50% of the disallowance of Rs. 47,43,236/- made by the AO on account of expenses incurred on guest house repairing. Again, it is brought to our notice by the ld. AR for the assessee that this issue has already been decided in favour of the assessee by the coordinate Bench of the Tribunal right from AYs 2001-02 to 2005-06. Coordinate Bench of the Tribunal in AY 2005-06 determined this issue in favour of the assessee by following the order of AY 2000-01 and 2001-02 in assessee's own case by returning following findings :- "10. The learned counsel for the a4sessee pointed out that in assessment year 1999-2000, the Tribunal vide order dated 25.7.2008 in ITA No.4565/ Delhi/2002 has accepted the assessee's contentions, A copy of th....
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....ose of computation of book profit u/s 115JB of the IT Act. 16. Aggrieved with such order of the CIT(A), the Revenue is in appeal before the Tribunal. 17. The ld. DR heavily relied on the order of the AO. 18. The ld. Counsel for the assessee, on the other hand, while supporting the order of the CIT(A), submitted that the AO made the disallowance u/s 14A r.w. Rule 8D while computing the book profit u/s 115JB without appreciating the following two issues:- "1. Method of computation of disallowance prescribed under Rule 8D is not applicable while computing Book Profit u/s 115JB. 2. Provisions of sub-section (2) and (3) of section 14A cannot be imported into clause (f) of Explanation to section 115JA while computing adjusted book profit." 19. Referring to the decision of the Tribunal in the case of Goetze (India) Ltd. vs. CIT, reported in 32 SOT 101 (Del), the decision of Kolkata Bench of the Tribunal in the case of Integrated Mining Ltd. vs. DCIT, reported in 67 taxmann.com 260 and the decision of the Hon'ble Karnataka High Court in the case of Shobha Developers Ltd. vs. DCIT, reported in 434 ITR 266 (Kar.), he submitted that the issue stands squarely covered in favour of the a....
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....it and loss: (5) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section. 7. Thus from perusal of the relevant extract of Section 115JB, it is evident that Sub-Section (1) of Section 115JB provides the mode of computation of the total income of the assessee and tax payable on the assessee under Section 115JB of the Act. Sub-Section (5) of Section 115JB provides that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee being a company mentioned in this Section. Therefore, any expenditure relatable to earning of income exempt under Section 10(2A) and Section 10(35) of the Act is disallowed under Section 14A of the Act and is added back to book profit under clause (f) of Section 115JB of the Act, the same would amount to doing violence with the statutory provision viz., Sub-Section (1) and (5) of Section 115JB of the Act. It is also pertinent to mention here that the amounts mentioned in clauses (a) to (i) of explanation to Section 115JB(2) are debited to the statement of profit and loss account, then only the provisions of Section 11....