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TMI Blog2012 (10) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... k profit u/s 115JB of the Income Tax Act, 1961 (the Act) at ₹ 8,97,48,777/- vide order dtd. 29-12-2009 passed u/s 143(3) of the Act. On appeal, the ld. CIT(A) partly allowed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the Revenue and the assessee both are in appeal before us. ITA No. 4567/Mum/2011 (By Revenue) 4. Ground No. is against the part relief allowed by the ld. CIT(A) in respect of disallowance u/s 14A of the Act. 5. Brief facts of the above issue are that the A.O. observed that the assessee had made investment in shares and also carried out trading in shares on which dividend income of ₹ 12,02,765/- has been earned which was claimed exempt u/s 10(34) of the Act. The A.O. further observed that an expenditure of ₹ 1,13,676/- has been allocated against such exempt income. The A.O. further observed that the company cannot earn dividend without its existence and management. He further observed that investment decisions are very complex in nature and require substantial market research, day-to-day analysis or market trends and decisions with regard to acquisition, retention and sale of shares at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C Average Assets Particulars Amount (Rs) Opening Balance 51,23,97,001 Closing Balance 51,81,00,000 Total 103,04,97,001 Average Investment 51,52,48,501 The ld. CIT(A) while relying on the decision of Hon ble jurisdictional High Court in Godrej and Boyce Mfg. Co. Ltd. (supra) rejected the plea of the assessee that no expenditure had been incurred for earning exempt income and that only direct expenditure can be considered for disallowance observed that the assessee has not established that borrowed funds have not been utilised for making such investments income from which was exempt from tax, however, accepted the calculation given by the assessee and held that the disallowance u/s 14A should be restricted to ₹ 31,69,778/-. 6. At t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of service tax u/s 43B of the Act. 10. Brief facts of the above issue are that the A.O. observed that the assessee has shown other liability of ₹ 1,17,36,988/-. By letter dtd. 25-12-2009 the assessee filed details of other liabilities along with proof of payment. On perusal of the details, the A.O. observed that it included service tax payable of ₹ 48,10,998/- and service tax payable on Management Consultancy of ₹ 41,97,663/- for which no documentary evidence for payment was filed. The A.O. presumed that such service tax had not been paid and accordingly disallowed the service tax payable of ₹ 90,08,661/- (₹ 48,10,998/- plus ₹ 41,97,663/-) u/s 43B of the Act. On appeal it was submitted by the assessee that the sum of ₹ 41,97,663/- had been paid before the due date of filing of return and in support copies of challans were also filed. Regarding service tax payable of ₹ 48,10,998/- it was contended that there was no liability to pay service tax as on 31-3-2007 as the amounts were not received from the parties to whom services were provided, therefore, provisions of section 43B are not applicable. The ld. CIT(A) while deletin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14. In the absence of any distinguishing feature brought on record by the Revenue, we respectfully following the consistent view of the Tribunal decline to interfere with the order of the ld. CIT(A) and accordingly the ground taken by the Revenue is rejected. 15. Ground No. 3 is against the deletion of disallowance of payment of software charges ₹ 10,68,161/-. 16. Brief facts of the above issue are that the A.O. observed that the assessee has made payment of software charges to its group companies which are (a) IL FS Infotech Ltd. ₹ 9,80,825/- and (b) IL FS Infotech Finvest Ltd. ₹ 16,89,500/-. He further observed that as the assessee has not submitted any documentary evidence which could substantiate that the above expenditure were revenue in nature, the A.O. treated the entire software expenditure claimed of ₹ 26,70,405/- as capital expenditure after allowing depreciation @ 60% which was worked out to ₹ 16,02,243/-, and accordingly he disallowed a sum of ₹ 10,68,162/-. On appeal it was submitted by the assessee that the expenditure was not incurred for purchase of software but for maintenance of software a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see s appeal in ITA No. 4594/Mum/2011 read as under:- 1. On the facts and circumstances of the case the Learned Commr. of Income Tax (Appeals) has erred in confirming that while computing the book profit u/s 115JB the disallowance made u/s 14A amounting to ₹ 31,69,788/- be added to the book profit. The appellant prays that the conclusion reached by the Learned CIT(A) is erroneous and contrary to the provisions of law. 2. The appellant prays that while computing book profit u/s 115JB no addition of the disallowance computed u/s 14A should be made to the book profit. 3. The appellant prays that the book profit may be computed u/s 115JB without making any additions on account of the disallowance computed u/s 14A. 22. Since common issue is involved, the above grounds are disposed of as under. 23. Brief facts of the above issue are that the A.O. while calculating the book profit u/s 115JB of the Act has taken net profit as per P L account ₹ 7,97,91,844/- and added disallowance u/s 14A ₹ 99,56,933/- and thus he worked out the total book profit ₹ 8,97,48,777/-. On appeal it was submitted that as per clause (f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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