9911796707
TMI Blog2019 (7) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... lready disallowed 10% thereof. Therefore, another disallowance of 40% on the aforesaid amount which works out to ₹ 2,64,720/- would thus meet the object in this regard. The assessee accordingly, gets partial relief. Adjustments made on account of disallowance computed u/s 14A while computing book profit u/s 115JB - HELD THAT:- We find merit in the plea of the assessee on this score. The Special Bench of Tribunal in the case of CIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] has observed that disallowance computed u/s 14A cannot be imported to the provisions of sec. 115JB. However, at the same time, the claim of the assessee that no adjustment is called for while computing book profit is voilative of Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A while computing book profits under s. 115JB of the Act. 3. When the matter was called for hearing, the Ld. AR for the assessee submitted that assessee has earned dividend income of ₹ 29,30,083/- during the year which was claimed as exempt on investment held by it amounting to ₹ 29,82,54,378/- in its balance sheet. The Ld. AR submitted that the assessee has engaged one Mr. Sameer Parikh, Chartered Accountant to provide supervisory and advisory services in the areas of amounts, taxation and investment advisory services. The said employee has been paid an amount of ₹ 6,61,800/- for such services. The assessee has suo moto estimated 10% of such amount that is ₹ 66,180/- as expense attributable to exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment to the tune of ₹ 27.24 crores in the earlier year which has increased to ₹ 29.82 crores during the year. The assessee has made a suo moto disallowance of ₹ 66,180/- being 10% of the amount paid to a professional dedicated for monitoring investments. Thus, a basis has been provided by the assessee for suo moto disallowance. In such circumstances, on a broader consideration, we note that where the investments were largely made in the earlier years and has been carried forward in the current year with a very few movements therein, a substantial disallowance of ₹ 14,26,648/- computed under Rule 8D(2)(iii) could not possibly be justified. The assessee himself has disallowed ₹ 66,180/- against such disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance computed under s. 14A cannot be imported to the provisions of sec. 115JB. However, at the same time, the claim of the assessee that no adjustment is called for while computing book profit is voilative of Explanation 1 (f) referred to in sec. 115JB of the Act and thus cannot be entertained. No blanket exemption can be read in the Special Bench decision in Vireet s case in this regard. Thus, the adjustment to the tune of ₹ 3,30,900 shall be taken into account by the AO for the purposes of Clause (f) to sec. 115JB in tune with disallowance sustained under normal provision. The second issue is accordingly allowed in partly. 8. In the result, appeal of the assessee is partly allowed. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
