TaxTMI 
TaxTMI 
2017 (12) TMI 1841
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....Y 2009-10. S.K. Agarwal, Ld. Authorized Representative appeared on behalf of assessee and Saurabh Kumar, Ld. Departmental Representative represented on behalf of Revenue. 2. The assessee has raised the following grounds of appeal: "1. That on the facts and circumstances of the case, the ld. CIT(A) erred in confirming the disallowance of Rs.19,23,063/- u/s 14A r.w.r 8D(2)(iii) in as much as the actual expenses debited to P/L A/c & claimed is Rs.51,669/-. 2. That on the facts & circumstances of the case the ld. CIT(A) erred in confirming the addition of Rs.19,52,849/- to book profit u/s 115JB. 3. That on the facts and circumstances of the case and without prejudice to Ground No.2. The addition to Book Profit s....
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.... & Rates Rs.5800/- Filing Fees Rs.3168/- Professional Fees Rs.10551.00 Miscellaneous Expenses Rs.15296/- Auditors remuneration Rs.16854/- Total Rs.51669/- Thus, the assessee submitted that the expenses under Rule 8D(2)(iii) of I.T Rules cannot exceed the expenses actually claimed by it in the P & L A/c. However, the ld. CIT(A) disregarded the contention of the assessee and confirmed the order of Assessing Officer by observing as under: "4.2 I am not in agreement with the views of the AR of the appellant. In his written submissions the AR has stated that the appellant has incurred a total expenditure of only Rs.51,699/- and he has cited case laws to argue that any disallowance cannot be made u/....
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....rity. 7. We have heard the rival contentions and perused the materials available on record. The issue in the instant case relates to the disallowance made by the AO u/s 14A r.w.r 8D(2)(iii) of the I.T Rules which was subsequently confirmed by ld. CIT(A). 8. From the above discussion, we note that Assessing Officer can resort to make the disallowance u/s 14A of the Act r.w.r. 8D of the IT Rules, 1962 after having regard to the accounts of the assessee and feels dissatisfied with the correctness of the claim of the assessee. Thus, it is clear that the AO can make the disallowances of the expenses incurred in relation to exempt income in pursuance to the provisions as specified u/s 14A of the Act. On perusal of the facts of the present c....
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....puting the income under section 115JB of the Act. 12. Aggrieved, assessee preferred an appeal to ld. CIT(A). The assessee before the ld. CTI(A) submitted that the disallowance made u/s 14A r.w.r 8D under the normal computation of income cannot be imposed to the computation of income determined u/s 115JB of the Act. However, the ld. CIT(A) disregarded the contention of the assessee and confirmed the AO by observing as under: 6.2 I have examined the submission of the AR of the appellant and perused the assessment order. The case laws quoted above by the AR of the appellant are relevant. However, in a subsequent decision, the ITAT Mumbai at ITA No.7546/Mum/2011 and ITA No.6678/Mum/2011 for Assessment Year 2008-09 in the case of ITO vs. R....
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.... Act. However, we note that in recent 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 that the disallowances made u/s 14A r.w.r. 8D cannot be the subject matter of disallowances while determining the net profit u/s 115JB of the Act. Relevant portion of the said order is reproduced below: "In view of above discussion, the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated under section 14A, read with rule 8D of the Income-tax Rules, 1962." The ratio laid down by the Hon'ble Tribunal is squarely applicable to the facts of the case. Thus it can be concluded that th....