TaxTMI 
TaxTMI 
2019 (11) TMI 1837
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.... exempt income during the year under consideration and the ld. CIT(A) has erred in holding that the disallowance under section 14A cannot be added in the book profit under section 115JB of the Income Tax Act, 1961 [Act in short]. 2. Brief facts of the case leading the ground raised by the Revenue are that the assessee showed income by way of dividend to the tune of Rs. 29,60,79,638/- and the same has been claimed as exempt under section 10(34) of the Act. On the above receipt of exempted income, the assessee has attributed an expenditure to the tune of Rs. 1,43,324/- in the memo of income and disallowance under section 14A of the Act. Further, during the year under consideration, the assessee made fresh investments of Rs. 17,50,00,000/-,....
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....d and gone through the orders of authorities below. The Assessing Officer quantified expenditure towards huge dividend yielding investment and earning huge income that were exempt from tax. By following the decision in the case of ACIT v. Vireet Investment (P) Ltd. (supra), the ld. CIT(A) directed the Assessing Officer to recompute the disallowance only on the investments which yielded exempt income during the year under consideration are to be included for the purpose of average value of investments. We have perused the said case law, wherein, the Special Bench of the Delhi Tribunal has observed that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. If an inve....
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.... giving effect to the disallowance of expenditure made invoking the provisions of the Section-14A of the Act for Rs. 3,11,34,630/- and also the disallowance of expenditure under the normal provisions of the Act. 8.1.1 The Ld. Assessing Officer while computing the tax as per provisions of section 115JB of the Act made additions to the book profit with respect to the disallowance made U/s. 14A of the Act read with Rules-8D of the Income Tax Rules. On appeal, the Ld. CIT (A) citing the provisions of clause (f) of Explanation-1 to Section-115JB, confirmed the order of the Ld. Assessing Officer. The relevant portion of the order of the Ld. CIT (A) is reproduced herein below for reference:- 10.2 I have gone through the facts and....
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....revious year prepared under sub-section(2), as increased by (a) To (e) ---------------------------------------------------- (f) the amount or amounts of expenditure relatable to any income to which [Section-10 (other than the provisions contained in clause (38) thereof] or section 11 or section 12 apply; (g) To (j) ----------------------------------------------------- From the above it is apparent that the aforesaid provision of the Act does not refer to any disallowance made U/s. 14A of the Act while arriving at the Book Profit for the purpose of Section-115JB(2) of the Act. Further Section 14A of the Act is a provision with fiction disallowing the deemed expenditure attributable to exempt income viz., d....
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....edule VI to the Companies Act in section 115J was made for the limited purpose of empowering the Assessing Officer to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, the Assessing Officer has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, which obligate the company to maintain its accounts in a manner provided by that Act and the same to be scrutinised and certified by statutory auditors and approved by the company in general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and be satisfied that the accounts of the company are maintained in accordance with the ....