2021 (10) TMI 260

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.... "1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 35,440/- being interest attributable to exempt income U/S.14A of the Act while computing the Book Profit u/s. l15JB of the I.T. Act, 1961 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs. 4,53,348/- made by the Assessing Officer U/S.14A of the Income Tax Act, 1961." 3. The brief fact of the case of the case is that return of income declaring total income at Rs. nil was filed on 30th Sep, 2014. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was issued on 24th Sep, 2015. The relevant facts of the case are discussed while adjudicating the two grounds of ....

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....A) has restricted the addition to the extent of Rs. 35,440/- as disallowance computed by the assessee company. With the assistance of ld. representatives, we have gone through the decision of ACIT vs. Vinit Investment Special Bench ITAT Delhi wherein it is held that expenditure incurred to earn exempt income not to be added for computing book profit u/s. 115JB of the Act. Therefore, following the decision of the Co-ordinate Bench as above we consider that decision of ld. CIT(A) in sustaining the part of the addition is not justified, therefore the impugned addition is deleted and appeal of the assessee is allowed on this issue. Ground No. 2 (Confirming disallowance of Rs. 4,53,348/- u/s. 14A of the Act) 8. During the course of assessm....

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....er consideration. It was further stated that investments were made out of the interest free loan received by the assessee. The ld. counsel has also submitted that as per detail furnished during the course of assessment and appellate proceedings the total interest attributable to the loans taken for purchasing shares was to the extent of Rs. 35,440/-. On the other hand, ld. Departmental Representative has supported the order of lower authorities. 11. We have heard both the sides and perused the material on record. The Assessing Officer has made disallowance of Rs. 4,53,348/- u/s. 14A r.w.r. 8D of the I.T. Rule 1961. On perusal of the material on record, it is observed that during the course of assessment and appellate proceedings the asse....