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TMI Blog2019 (2) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the CIT(A) with regard to disallowance u/s.14A under normal provisions of the Act. Accordingly Ground No.(i) raised by the revenue is dismissed. Disallowance u/s.14A is to be made in terms of Clause(f) of Explanation-1 of Section 115JB. Hence, we direct the AO to look into the expenses debited in the profit and loss account and identify each and every expenditure and ascertain the quantum of expenditure incurred for the purpose of earning exempt income and make disallowance under Clause(f) of Explanation 1 to Section 115JB of the Act. Accordingly, Ground raised by the Revenue is allowed for statistical purposes subject to directions contained hereinabove. Disallowance u/s.14A in respect of investment in shares which were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 8D(2) of the Rules could be made while computing the book profits u/s.115JB of the Act. 3. Facts of A.Y.2013-14 are taken up for adjudication and the decision rendered thereon would apply with equal force for A.Y.2014-15 also except with variance in figures. 4. The brief facts of this issue are that assessee is a public limited company engaged in the business of leasing, lending, investment in shares and securities. The assessee in the return of income declared a sum of ₹ 132,43,53,846/- as dividend and claimed the same as exempt. The assessee suomoto made disallowance u/s.14A of the Act to the tune of ₹ 5,87,66,710/- being attributable administrative expenses. The Ld. AO considered the workings of the assessee in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come ₹ 199,64,44,659 iii. Addition under clause (f) of Explanation to Section 115JB ₹ 51,36,26,389 x ₹ 132,43,53,846 _____________________________________ Rs.199,64,44,659 Rs.34,07,17,225 7. Accordingly, the Ld. AO made disallowance of ₹ 33,72,17,245/- u/s.14A while computing the book profits u/s.115JB of the Act. 8. The assessee added back a sum of ₹ 35 lakhs on an adhoc basis towards disallowance u/s 14A of the Act, while computing the book profits u/s.115JB of the Act in the return of income and prayed for exclusion of the same before the Ld. CIT(A). The Ld. CIT(A) held that disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had yielded exempt income are to be considered while working out the disallowance under Rule 8D of Rules. Respectfully following the said Special Bench decision, we do not find any infirmity in the order of the Ld. CIT(A) with regard to disallowance u/s.14A under normal provisions of the Act. Accordingly Ground No.(i) raised by the revenue is dismissed. 11. With regard to computation of book profits u/s.115JB of the Act, the Special Bench of Delhi Tribunal in the case referred to supra had held that disallowance u/s.14A of the Act had to be made with reference to the expenses debited by the assessee in its profit and loss account on actual basis and not with regard to applying the computation mechanism provided under Rule 8D(2) of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debited in the profit and loss account and identify each and every expenditure and ascertain the quantum of expenditure incurred for the purpose of earning exempt income and make disallowance under Clause(f) of Explanation 1 to Section 115JB of the Act. Accordingly, Ground No.(iii) raised by the Revenue is allowed for statistical purposes subject to directions contained hereinabove. 13. The Ground No.(ii) raised by the Revenue with regard to action of the Ld. CIT(A) in deleting disallowance u/s.14A of the Act in respect of investment in shares which were made to obtain controlling interest in companies. We find that this issue had been settled in favour of the Revenue by the decision of Hon ble Supreme Court in the case of Maxoop Investm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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