2022 (5) TMI 1696

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.... read with Rule 8D of the Income-tax Rules, 1962 while computing book profit under section 115JB of the Act. 3. Briefly the facts are, the assessee is a resident company. In course of assessment proceeding for the impugned assessment year, the Assessing Officer noticed that the assessee had made huge investment in shares, which is likely to yield exempt income. Thus, he called upon the assessee to explain, why expenditure attributable to exempt income, which is likely to be earned in future, should not be disallowed in terms with section 14A read with Rule 8D. In reply, it was submitted by the assessee that since no exempt income was earned during the year, no disallowance under section 14A can be made. The Assessing Officer, however, di....

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.... the merits of the issue, learned Departmental Representative strongly relied upon the observations of the Assessing Officer. 6. Strongly relying upon the observations of the learned Commissioner (Appeals), the learned counsel for the assessee submitted, during the year under consideration, the assessee did not earn any exempt income. Therefore, no disallowance under section 14A read with Rule 8D can be made. Further, he submitted, the disallowance of expenditure under section 14A read with Rule 8D while computing book profit under section 115JB being highly debatable issue cannot be covered under the provisions of section 154 of the Act. 7. We have considered rival submissions and perused the materials on record. It is relevant to ob....