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2018 (6) TMI 825 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Held that - There is no doubt that purpose for which shares are held is not relevant and expenditure corresponding to the non-taxable income has to be disallowed proportionately. In view of the above we feel it appropriate to restore this issue to the file of the Assessing Officer for determining proportionate disallowance of expenditure under section 14A of the Act following the decision of the Hon ble Supreme Court in the case of Maxxop Investment Limited (2018 (3) TMI 805 - SUPREME COURT OF INDIA). It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. Disallowance under section 14A to the book profit under section 115JB - Held that - Computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D of the Income tax Rules 1962 - addition under clause (f) of Explanation 1 to section 115JB of the Act need to be determined without resorting to computation provided in section 14A read with Rule 8D of the Rules. Accordingly we restore the issue in dispute to the file of the Assessing Officer for deciding in accordance with law after providing adequate opportunity of being heard to the assessee. Not granting TDS credit - Held that - In the instant case the assessee has not presented before us details of each TDS amount credit of which has not been allowed by the Assessing Officer. In view of circumstances we restore this issue to the file of the Assessing Officer and direct him/her to verify and allow the claim of the TDS in view of our direction above. We also direct the assessee to produce original copies of TDS certificates for verification along with one photocopy of said certificates before the Assessing Officer within 3 months of receipt of this order. The Assessing Officer may verify genuineness of the TDS certificates and allow the credit of the TDS amount accordingly Error in tax computation form - arithmetical error - Held that - We are agreed with the Ld. counsel that Assessing Officer has committed mistake in transporting amount of profit under section 115 JB of the Act from assessment order to tax computation form. We accordingly direct the Assessing Officer to rectify the mistake and re-compute the tax liability of the assessee accordingly. This ground of the appeal is accordingly allowed for statistical purposes.
Issues Involved:
1. Disallowance under Section 14A read with Rule 8D. 2. Non-granting of TDS credit. 3. Addition to book profit under Section 115JB. 4. Charging of interest under Sections 234C and 234B. 5. Arithmetical error in tax computation form. 6. Charging of interest under Section 234D. Detailed Analysis: 1. Disallowance under Section 14A read with Rule 8D: The assessee challenged the disallowance of ?58,55,000 sustained by the CIT(A) under Section 14A read with Rule 8D(2)(iii). The assessee argued that the securities were held as stock-in-trade, and the primary objective was to earn profits on their sale, with dividend income being incidental. The Tribunal referred to the Supreme Court's decision in the case of Maxopp Investment Limited, which clarified that even if shares are held as stock-in-trade, the expenditure must be apportioned between taxable and non-taxable income. Consequently, the Tribunal restored the issue to the Assessing Officer for determining the proportionate disallowance of expenditure under Section 14A, following the Supreme Court's decision. 2. Non-Granting of TDS Credit: The assessee claimed that the Assessing Officer allowed TDS credit of ?3,10,58,204 against a claim of ?3,51,69,919, resulting in a shortfall of ?41,11,715. The Tribunal directed the Assessing Officer to verify the genuineness of the TDS certificates and allow the credit accordingly, emphasizing that the assessee should not suffer due to the deductor's failure to deposit TDS or file returns. 3. Addition to Book Profit under Section 115JB: The assessee contested the addition of ?58,55,000 to book profit under Section 115JB, corresponding to the disallowance under Section 14A. The Tribunal referred to the Special Bench decision in Vireet Investment Private Limited, which held that the computation under clause (f) of Explanation 1 to Section 115JB should be made without resorting to Section 14A read with Rule 8D. The issue was restored to the Assessing Officer for re-computation in accordance with the law. 4. Charging of Interest under Sections 234C and 234B: The assessee disputed the interest charged under Section 234C amounting to ?1,10,23,074 and under Section 234B amounting to ?32,40,33,468. The Tribunal noted that these issues were consequential to the TDS credit issue and restored them to the Assessing Officer for recomputation after allowing the correct TDS credit. 5. Arithmetical Error in Tax Computation Form: The assessee pointed out an error in the tax computation form, where the book profit was incorrectly taken as ?1128,29,54,248 instead of ?1018,69,66,304. The Tribunal directed the Assessing Officer to rectify the mistake and recompute the tax liability accordingly. 6. Charging of Interest under Section 234D: The assessee also raised an issue regarding the interest charged under Section 234D for three months instead of two. The Tribunal restored this issue to the Assessing Officer for verification and computation in accordance with the law, after allowing the correct TDS credit. Conclusion: Both appeals were allowed for statistical purposes, with several issues restored to the Assessing Officer for re-examination and proper computation in accordance with the law, ensuring that the assessee is afforded adequate opportunities to present their case.
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