AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 1711
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.... days. At the time of hearing the counsel of the revenue explained the reason for delay in filing the appeal. The Ld. A.R did not raise any objection in condoning the delay. Keeping in view, the submission made by the A.R. and the judicial pronouncement that a case should be decided on merit not on technical issue, the delay is hereby condoned 03. Brief fact of the case is that the assessee company e-filed its original return under sec 139(1) of the Income Tax Act, 1961 was filed on 28.09.2015 disclosing a total income of Rs.20,32,46,910/-. The case was selected for Limited scrutiny through CASS and notice u/s 143(2) and 143(1) were issued and served upon the assessee. Assessment was completed u/s 143(3) of the Act on 05.10.2017 determin....
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.... 14A read with Rule 8D of IT Rules 1962 is a notional disallowance and cannot be imported while computing book profit u/s 115JB of the Act whereas clause (f) of the Explanation 1 of section 115JB specifically states that book profit shall be increased by the amount or amounts of expenditure relatable to any income to which section 10 apply and expenditure disallowed u/s 14A related to expense made on earning income exempt u/s 10 of the Act. 07. Contrary to that the ld. AR supports the impugned order thereby submitting that there is no infirmity in the impugned order as assessee had earned total exempted income amounting to Rs.31,50,337/- during the year under consideration as it is evident from the audited accounts. The ld. AR submits th....
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....he Act. We have gone through the order passed by the co-ordinate Bench of the Kolkata in assessee's own case for A.Y. 2013-14 and find that the issue raised by the Revenue in the said case are as follows: - "i. That on the fact and in restricting the disallowance u/s 14A to Rs.5,10,242/- by observing that such disallowance u/s 14A should be in respect only of that part of investment which gives rise to exempt income during the year, whereas circular No.5/2014 dated 11.02.2014 has amply clarified that for invoking disallowance u/s 14A, it is not material that assessee should have earned such income during the financial year under consideration. 09. The relevant portion of the said order are hereby reproduced hereinbelow: - ....
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....117/- 42,93,163/- 3 Reliance Money Manager Fund 198,623,445/- 80,05,458/- 4 Reliance Medium Term Fund 77,97,632/- Total 47,12,988/- 199,383,873/- 249,35,645/- Average investments = (47,12,988 + 199,383,873)/2= Rs.102,048,430/- Disallowance under Rule 8D(iii) = (0.5% of Avg. Investment) - (0.5% of Rs.102,048,430) = Rs.5,10,242/- We note that the calculation u/r 8D(2)(iii) r.w.s. 14A, for the investments made by the assessee come to Rs. 5,10,242/- which has been verified by the ld CIT(A), who has co-terminus power as that of assessing officer. Accordingly, addition on this ground is restricted to Rs. 5,10,242/- and the balance addition of Rs. 90,67,008/....
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....ts of the case, we do not find any infirmity in the impugned order as the ld. CIT (A) has rightly directed the ld. AO to verify and recompute the disallowance u/s 14A read with Rule 8D of the Rules considering only those investments which have yielded exempt income during the year. 11. So far as the second ground of appeal is concerned, we find that the co-ordinate Bench of Kolkata in ITA No. 1850/KOL/2024 has discussed the issue and the relevant portion of the order is reproduced hereinbelow: - "11. So far as the second issue is concerned, it was the submission of the assessee that the issue of disallowance under section 14A while computing the book profit under section 115JB of the Act, has been settled in view of the decision....
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....produc hereinbelow:- "With regard to application u/s. 14A while computing the book profit u/s. 115JB. the appellant submits that the provisions of section 115JB shall have an overriding effect on the other provisions of the Act. Section 115JB(2) provides the modes of computation of the book profit of the assessee. Section 115JB(2) provides the mode of computation of the book profit of the assessee. Book Profit means the net profit as shown in the Profit & Loss Account for the relevant previous year prepared in accordance with the provisions of II and III of Schedule VI to the Companies Act, 1956 (1 of 1956). Such Book Profit is then increased by adding items (a) to (k) as mentioned in Explanation 1 to section 115JB is they....