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TMI Blog2016 (12) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 14A read with Rule 8D for computing book profit under Section 115JB was deleted. While it is possible to restrict this observation for the purpose of Section 115JB alone, it is also possible that in future the same confusion may arise on account of the assessee contending that the disallowance under Section 14A was set aside. The Tribunal has gone a step further in observing that the issue of disallowance under Section 14A was academic. It is not. As we mentioned earlier, it is necessary that the disallowance under Section 14A is also computed for it may have an effect in the future years on account of the benefit accorded to an assessee under Section 115JAA. In these circumstances, the impugned order and judgement is set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbed book profits. (b) In view of the above Hon ble ITAT has erred in not appreciating the fact that the decision in the case of M/s Nahar Capital and Financial Services, Ludhiana is not applicable in this case. (iii) Whether on the facts and in the circumstances of the case and in law the ld. ITAT is correct in upholding the order of the ld. CIT (Appeal) without appreciating the implication of sub section (1A), (2A), (3A)(4) and (5) of Section 115JAA r.w. Section 115JB of the I.T. Act, 1961? 3. Neither the CIT (Appeals), nor the Tribunal have adopted the correct approach to the matter. They have not adverted to the main issue that arises. 4. The assessee filed its return of income for the assessment year 2007-2008 show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 28,87,00,981/- were assessed to tax. The issue which needs to be considered is whether provisions of section 14A are applicable for determining book profits under section 115JB of the Act. This issue is squarely covered by the decision of the Hon ble ITAT, Chandigarh in the case of M/s Nahar Capital and Financial Services, Ludhiana for A/Y 2008-09. In this order dated 27.07.2012 in ITA No. 1120/CHD/2011, the Hon ble ITAT held as under:- The issue arising in the present appeal is identical to the issue before the Chandigarh Bench of the Tribunal in DCIT Vs. Ind-Swift Ltd. (Supra) and following the same we direct the Assessing Officer to adopt the book profits as per the Profit loss Account and to not make addition on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servation for the purpose of Section 115JB alone, it is also possible that in future the same confusion may arise on account of the assessee contending that the disallowance under Section 14A was set aside. 6. More important, it was necessary for the CIT (Appeals) to compute the disallowance under Section 14A for the purpose of future assessment years. Under Section 115JAA of the Act, it was necessary to compute the correct disallowance under Section 14A, as the assessee is entitled to the credit stipulated therein. It was necessary, therefore, for the CIT (Appeals) to compute the disallowance, if any, under Section 14A. 7. The Tribunal fell into the same error. Paragraph 6 of the order of the Tribunal impugned in this appeal reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal appeal, thus has no merit and is accordingly dismissed. 8. The Tribunal has gone a step further in observing that the issue of disallowance under Section 14A was academic. It is not. As we mentioned earlier, it is necessary that the disallowance under Section 14A is also computed for it may have an effect in the future years on account of the benefit accorded to an assessee under Section 115JAA. 9. In these circumstances, the impugned order and judgement is set aside. The matter is remanded to the Tribunal for determining all the issues raised by the assessee especially the issue of disallowance under Section 14A. Needless to clarify that all the contentions of the parties including as to the applicability of Rule 8D are kept o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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