2022 (10) TMI 830

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....18. 2. The brief facts of the case are as follows: The assessee is a company engaged in maintaining and operation of Airport. For the assessment year 2017-2018, the return of income was filed on 29.03.2019 declaring total income of Rs.27,41,30,320. Assessment u/s 143(3) of the I.T.Act was completed on 30.03.2021 determining the total income of the assessee at Rs.70,34,76,930. Subsequently, the A.O. passed order dated 18.06.2021 u/s 154 of the I.T.Act, wherein the book profit of the assessee were recomputed, as follows:- Sl. No. Particulars Amount 1. Inclusion of surplus of PSF (SC) of Rs.19,14,43,451 19,14,43,451 2. Disallowance u/s 14A at Rs.3,37,88,198 by applying Rule 8D as against the amount of disallowance....

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.... of disallowance worked out at Rs.3, 15,41,178/- based on formula prescribed as per Rule 8D cannot be considered as the amount incurred to earn exempt income for the purpose of computation of Book Profit as per section 115JB. 3.The Learned CIT(A) failed to appreciate and ought to have held that for the purpose of computation of total income u/s 115JB the actual amount incurred for earning exempted income having regard to the books of account is to be considered and not the amount worked out based on formula prescribed in Rule 8D. 4.The Appellant therefore prays that the AO be directed to consider the amount for add back to the amount of net profit as is being incurred to earn exempted income having regard to books of accou....

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....ation to section 115JB while computing the amount of Book Profit u/s 115JB." We shall adjudicate the above grounds as under: Ground II 5. During the relevant assessment year, the assessee had earned dividend income of Rs.11,31,50,006 on investments made in joint venture companies. The assessee in the return of income filed had claimed exemption of the above said dividend income as per the provisions of section 10(34) of the I.T.Act. The A.O. while completing the assessment u/s 143(3) of the I.T.Act vide order dated 31.03.2021, had made disallowance u/s 14A of the I.T.Act of Rs.3,37,88,198 as against suo moto disallowance made by the assessee in the return of income amounting to Rs.22,47,020. The disallowance was made by the A.O. ba....

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....ows:- "9. Having regard to this decision, the decision cited by the revenue in the case of Sobha Developers (supra) has been considered. At this juncture, it would be beneficial to refer to the co-ordinate bench decision of this Court in the case of Karnataka State Industrial and Infrastructure Development Corporation Ltd. v. Dy. CIT [2021] 125 taxmann.com 221/278 Taxman 126/431 ITR 255 (Kar.), wherein the computation of book profit with reference to sections 14A and 115JB has been considered and it is held that Explanation 1 in section 115JB(2) has been inserted so as to provide that if any provision for diminution in the value of any asset has been debited to the profit and loss account, it shall be added to the net profit as sho....

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.... on the face of the record i.e., when the matter requires adjudication upon the issue which is a debatable issue. 12. In the light of these judgments, the finding given by the Tribunal on the points inasmuch as invoking of section 154 and Explanation 1 (f) to section 115JB being squarely covered, the same cannot be found fault with. We are of the considered view that the Miscellaneous Petition filed by the revenue under section 254(2) of the Act was wholly misconstrued. The Tribunal has distinguished the case of Sobha Developers (supra) relied upon by the revenue with Vireet Investment (P.) Ltd. (supra) and has rightly come to the conclusion that the judgment of the Vireet Investment (P.) Ltd. (supra) rendered by the Special Bench ....

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....o made is contrary to the provisions of Income-tax Act and settled legal position. In this context, the learned AR relied on the following judicial pronouncements:- (i) Appollot Tyres Limited v. CIT reported in (2022) 255 ITR 273 (SC) (ii) M/s.Batliboi Limited v. DCIT in ITA No.5248/Mum/2015 (order dated 17.02.2021) (iii) Assessee's own case in ITA Nos.620/Bang/2017, 633/Bang/2017, ITA No.603/Bang/2017 and ITA No.604/Bang/2017 for A.Y. 2010-11 to 2013-14. (order dated 11.02.2022) (iv) Assessee's own case in ITA No.2189/Bang/2016 for A.Y. 2009-2010 (order dated 09.07.2019) (v) Addl.CIT v. Mumbai International Airport Pvt. Ltd. in ITA Nos.2760 & 3232/Mum/2012 (order dated 30.11.2016) (vi) ....