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TMI Blog2020 (4) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by Ld. Sr. Counsel could not be accepted. While computing the disallowance, only those investments were to be considered which yielded exempt income during the year - AO is directed to verify the computations and restrict the disallowance considering only those investments which have yielded exempt income during the year. The separate disallowance of Bank Charges for ₹ 1.38 Lacs would not be warranted since it could not be said that the bank was used only for the purpose of earning exempt income. Ground No. 1 stand partly allowed. MAT computation u/s 115JB - HELD THAT:- Unless the factum of debit of actual expenditure was brought on record, adjustment of disallowance u/s 14A while computing book profits u/s 115JB wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Years [in short referred to as AY ] 2010-11 and 2013-14 contest separate orders of learned first appellate authority. Since common issues were involved, the appeals were heard together and are now being disposed-off by way of this consolidated order for the sake of convenience and brevity. First, we take up appeal for AY 2010-11. ITA No.6561/Mum/2014, AY 2010-11 2.1 The perusal of order sheet entries would reveal that this appeal was already heard on 17/08/2017 and the order was pronounced on 06/09/2017. However, finding inadvertent mistake in the same, the said order was recalled by the bench on 06/12/2017. Accordingly, the appeal has come up for fresh hearing before this bench. 2.2 The assessee is under appeal challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by ₹ 34,59,553/- and the income u/s. 115JB be considered at ₹ 6,67,74,763/- only. As evident, the issues which arise for our consideration are disallowance u/s. 14A and disallowance u/s. 40(a)(ia). 2.3 We have carefully heard the arguments advanced by respective representatives. We have perused relevant material on record and deliberated on judicial pronouncements as cited before us. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 3.1 Facts on record would reveal that assessee being resident corporate assessee stated to be engaged as builder and developer was assessed for year under consideration u/s. 143(3) on 26/11/2012 wherein income of the assessee was determined at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the said disallowance was confirmed. The assessee had also assailed the adjustment of both disallowance u/s 115JB, however, the same was also rejected. Aggrieved, the assessee is under further appeal before us. 5.1 Before us, Ld. Sr. Counsel has raised a plea that Ld. AO failed to record requisite satisfaction before proceeding to compute disallowance u/s 14A r.w.r. 8D and therefore, the disallowance was bad in law. However, we find that no suo-moto disallowance was offered by the assessee despite earning exempt income in the form of dividend income and LTCG. The Ld. AO specifically took note of the fact that most of the income earned by the assessee was in the form of dividend income and capital gains. The said analysis, in our opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS. Unless the same was specifically covered by manner of computations as provided u/s 115JB, the adjustment of the same would also not be justified. Therefore, both these disallowances would not be added back while computing Book Profits u/s115JB. 5.4 Resultantly, the appeal stands partly allowed. ITA No.2973/Mum/2017, AY 2013-14 6.1 The assessment for this year was framed u/s 143(3) on 26/02/2016. The assessee earned exempt income of ₹ 176.55 Lacs but did not offer any disallowance u/s14A.The Ld. AO worked out expense disallowance of ₹ 25.18 Lacs u/r 8D(2)(iii). The same, upon confirmation by Ld. CIT(A), is under further appeal before us. Finding the facts to be pari-materia the same, we direct Ld. AO to comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Sr. Counsel explained that the outstanding amount of ₹ 73.23 Lacs was not paid since the directors of other entity owed assessee aggregate sum of ₹ 59.56 Lacs in their individual capacity. The debt was acknowledged by the said entity and hence the outstanding amount was not paid by the assessee. Nevertheless, the liability was subsisting and confirmed by the creditors also and therefore, the provisions of Sec. 41(1) were not applicable. The Ld. DR submitted that the onus to prove that the debts were subsisting was upon assessee. 6.4 After careful consideration, we find that on page no. 39 of the paper-book, the assessee has placed on record debt-confirmation dated 24/02/2016 issued by M/s Status Marketing Pvt. Ltd. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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