2018 (9) TMI 947 - AT - Income Tax

Disallowance u/s 14A read with Rule 8D under normal provisions of the computation of Income under the Act - Held that - Restore the matter back to the file of the AO for deciding afresh the disallowance warranted under Rule 8D having regard to the guidelines laid down by the Hon ble Supreme Court in the case of Godrej And Boyce Mfg. Co. Ltd. 2017 (5) TMI 403 - SUPREME COURT OF INDIA and Maxopp Investment Ltd vrs. CIT (2018 (3) TMI 805 - SUPREME COURT OF INDIA). Accordingly, this ground is allowed for statistical purposes. Addition u/s. 14A r.w.r. 8D(2) to the total income of the assessee u/s. 115JB - Held that - We also restore the matter back to the file of AO with a direction to re-compute the income u/s.115JB in terms of our above discussion, following the proposition laid down by Special Bench of the Tribunal in case of Vireet Investment Pvt. Ltd., 2017 (6) TMI 1124 - ITAT DELHI

Summary

Issues:
1. Disallowance under sec. 14A read with Rule 8D of the Income Tax Act for AY 2012-13.
2. Deletion of addition made by AO u/s. 14A r.w.r. 8D(2) to the total income of the assessee u/s. 115JB of the I.T. Act for AY 2012-13.

Issue 1: Disallowance under sec. 14A read with Rule 8D of the Income Tax Act for AY 2012-13:
The Appellate Tribunal considered two appeals filed by the assessee and the revenue against the order of the Commissioner of Income Tax (Appeals) for AY 2012-13. The appeals were clubbed together due to common issues. The primary issue was the disallowance under sec. 14A read with Rule 8D of the Income Tax Act. The assessee was engaged in various business activities, and the AO had made additions u/s 14A r.w.r. 8D for computing book profit u/s 115JB. The Tribunal noted that the identical issue had been decided in the assessee's own case for previous years. The Tribunal, following previous decisions, restored the matter back to the AO for deciding afresh the disallowance warranted under Rule 8D, considering guidelines laid down by the Supreme Court and High Courts. The ground was allowed for statistical purposes.

Issue 2: Deletion of addition made by AO u/s. 14A r.w.r. 8D(2) to the total income of the assessee u/s. 115JB of the I.T. Act for AY 2012-13:
The revenue's appeal challenged the deletion of the addition made by the AO under sec. 14A r.w.r. 8D(2) to the total income of the assessee u/s. 115JB of the I.T. Act. The Tribunal found that this issue had already been decided in the assessee's favor in previous years. Citing a Special Bench decision, the Tribunal directed the AO to recompute the income u/s. 115JB without resorting to the computation as contemplated under sec. 14A read with Rule 8D. The Tribunal, following previous decisions, restored the matter back to the AO with a direction to re-compute the income u/s. 115JB. This ground was also allowed for statistical purposes.

In conclusion, the Appellate Tribunal's judgment addressed the disallowance under sec. 14A read with Rule 8D of the Income Tax Act and the deletion of additions made by the AO to the total income of the assessee u/s. 115JB for AY 2012-13. The Tribunal relied on previous decisions and directed the AO to recompute the income considering the guidelines laid down by higher courts. Both appeals were allowed for statistical purposes.