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TMI Blog2019 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... Year 2010-11. 2. The assessee filed its return of income declaring total loss at Rs. 2,53,93,280/-. The order u/s. 143(3) of the Act was passed dated 20.03.2013 assessing the total loss at Rs. 70,18,352/- after making disallowance u/s. 14A of Rs. 1,83,74,928/-. 3. The assessee, being aggrieved and dissatisfied preferred an appeal before the CIT(A). The CIT(A) deleted the disallowance. 4. In further appeal by the Revenue, the Appellate Tribunal dismissed the appeal and confirmed the order of CIT(A). The Appellate Tribunal while dismissing the appeal filed by the Revenue took the view that the assessee's own fund exceeded the amount of investment. While dismissing the appeal preferred by the Revenue, the Appellate Tribunal placed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Rules while determining the book profit under Section 115JB of the Act. It is settled law that the amount of disallowance made by the AO u/s 14A of the Act cannot be imported while determining the book profit u/s 115JB of the Act. In this regard, we rely on the judgment Hon'ble Gujarat High Court in the case of Alembic Ltd. in Tax Appeal No.1249/2014 where the following question was raised: "(iii) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in holding that adjustment made on account of disallowance u/s 14A of the Act in computation of book profit u/s 115JB of the Act is not as per law without appreciating that the amount disallowable under section 14A is covered under clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 14A r.w.r. 8D cannot be resorted while determining the expenses as mentioned under clause (f) to explanation 1 to section 115JB of the Act. 25.4 However, in our considered view the disallowance needs to be made as per Clause (f) to Section 115JB of the Act independently on account of dividend/exempted income as specified. The judgment of Hon'ble Gujarat High Court relied in the case of Alembic Ltd. (supra), does not deny for making the disallowance as per clause (f) u/s 115JB of the Act for the expenses incurred in relation to dividend income. 25.5 Thus it is clear that the disallowance needs to be made in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. In holding so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/determine the disallowance. Therefore in the given facts & circumstances, we feel that adhoc disallowance will service the justice to the Revenue and assessee. Therefore to put the dispute to rest in given facts & circumstances, we direct for the ad-hoc disallowance to avoid the multiplicity of the proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance of Rs. 5 Lacs under clause (f) to Explanation-1 of Sec.115JB of the Act. 25.8 We also feel to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation of Sec. 115JB o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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