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TMI Blog2019 (7) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerning A.Y. 2012-13. 2. In the captioned appeal, the assessee is aggrieved by the disallowance of Rs. 11,48,205/- sustained by the CIT(A) towards administrative expenses attributable to exempt income while computing the taxable income under the normal provisions of the Act. Similarly, the assessee is also aggrieved by the adjustment of the aforesaid amount of disallowance carried out under s. 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 Rs. 29,30,083/- during the year which was claimed as exempt on investment held by it amounting to Rs. 29,82,54,378/- in its balance sheet. The Ld. AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om formula prescribed in the statute by way of Rule 8D(2)(iii) of the Rules. Such disallowance according to DR, therefore, should not be tinkered. 5. We have carefully considered the rival submissions. We note that assessee has claimed exempt income of Rs. 29,30,083/- only. The assessee was holding investment to the tune of Rs. 27.24 crores in the earlier year which has increased to Rs. 29.82 crores during the year. The assessee has made a suo moto disallowance of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under s. 14A while computing book profit under s. 115JB. 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. 165 ITD 27 (Del)(SB) has observed that disallowance 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 Rs. 3,30,900 shall be taken into account by the AO for the purposes of Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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