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TMI Blog2021 (1) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... d 01.03.2016 on the following substantial question of law: "Whether the tribunal is justified in law in holding that the indirect expenditure disallowed under Section 14A read with rule 8D(iii) of Rs. 24,64,632/- in computing the total income under normal provisions of the Act, is to be added to the net profit in computation of book profit for MAT purposes under Section 115JB and thereby importing the provision of Section 14A read with rule 8D into the MAT provisions on the facts and circumstances of the case? 2. Facts leading to filing of this appeal briefly stated are that the assessee is a company and is a undertaking of Government of Karnataka, which is engaged in financing industrial units in the State of Karnataka. The assessee fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... background, the assessee has filed this appeal. 4. Learned counsel for the assessee submitted that the aforesaid substantial question of law has already been answered by this court in favour of the assessee in 'COMMISSIONER OF INCOME TAX, BANGALORE Vs. GOKALDAS IMAGES (P) LTD.' (2020) 122 TAXMANN.COM 160 (KAR). On the other hand, learned counsel for the revenue has submitted that the assessee has earned income which is exempt under Section 10(2A) and Section 10(35) of the Act and the expenditure incurred on the exempt income has been calculated under Rule 8D of the Rules. It is also urged that he provisions of Section 115JB of the Act are attracted in the fact situation of the case. 5. It is also argued that Section 10(2A) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 14A of the Act is applicable to computation of book profit under Section 115JB of the Act. In support of aforesaid submission reliance has been placed on 'JOINT COMMISSIONER OF INCOME TAX VS. ROLTA INDIA LTD.' (2011) 330 ITR 470 (SC) and 'MAXOPP INVESTMENT LTD. VS. COMMISSIONER OF INCOME TAX, NEW DELHI' (2018) 402 ITR 640(SC). 6. We have considered the submissions made on both sides and have perused the record. Before proceeding further, it is apposite to take note of relevant extract of Section 115JB of the Act, which reads as under: 115JB. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and tax payable on the assessee under Section 115JB of the Act. Sub-Section (5) of Section 115JB provides that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee being a company mentioned in this Section. Therefore, any expenditure relatable to earning of income exempt under Section 10(2A) and Section 10(35) of the Act is disallowed under Section 14A of the Act and is added back to book profit under clause (f) of Section 115JB of the Act, the same would amount to doing violence with the statutory provision viz., Sub-Section (1) and (5) of Section 115JB of the Act. It is also pertinent to mention here that the amounts mentioned in clauses (a) to (i) of explanation to Section 115JB(2) a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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