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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 ..... f the Act, the amount cannot be added back to book profit under clause (f) of Section 115JB. In Rolta India Ltd. [ 2011 (1) TMI 5 - SUPREME COURT] was dealing with the issue of chargeability of interest under Section 234B and 234C of the ct on failure to pay advance tax in respect of tax payable under Section 115JA/ 115JB of the Act and therefore, the aforesaid decision has no impact on the issue involved in this appeal. Similarly, in MAXOPP Investment Ltd.[ 2018 (3) TMI 805 - SUPREME COURT] has dealt with Section 14A of the Act and has not dealt with Section 115JB of the Act. Therefore, the aforesaid decision also does not apply to the fact situation of the case. Substantial questions of law framed by a bench of this court are answ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee returned the income of ₹ 13,60,88,457/- under the provisions of Section 115JB of the Act. The return filed by the assessee was selected for scrutiny and Assessing Officer by an order dated 29.12.2010 completed assessment under Section 143(3) of the Act and determined loss of ₹ 1,73,60,700/- under the provisions of the Act. The Assessing Officer also determined the book profit under Section 115JB of the Act at ₹ 30,01,07,991/-. 3. The assessee thereupon filed an appeal before Commissioner of Income Tax (Appeals) who by an order dated 31.08.2012 partly allowed the appeal of the assessee with regard to provisions of gratuity and leave encashment and partial relief in respect of disallowance under Section 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its share in the total income of the firm, whereas, Section 10(35) exempts income exempts income by way of units of mutual funds. It is also contended that income referred to in Section 10A of the Act is exempt and income not includable in total income referred to in Section 14A is with respect to exempt income under Section 10 of the Act. Therefore, any expenditure incurred for earning the exempt income under Section10 of the Act has to be disallowed under Section 14A of the Act. It is also argued that any expenditure relatable to earning of income exempt under Section 10(2A) and Section 10(35) of the Act has to be disallowed under Section 14A of the Act and has to be added back to book profit under Section 115JB of the Act. It is further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing on or after the 1st day of April, 2012, is less than eighteen and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of eighteen and one-half per cent. (f) the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply; or (i) the amount or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (i) is debited to the statement of profit and loss or if any amount referred to in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly the provisions of Section 115JB would apply. The disallowance under Section 14A of the Act is a notional disallowance and therefore, by taking recourse to Section 14A of the Act, the amount cannot be added back to book profit under clause (f) of Section 115JB of the Act. It is also pertinent to mention here that similar view, which has been taken by this court in Gokaldas Images (P) Ltd. supra was also taken by High Court of Bombay in 'THE COMMISSIONER OF INCOME TAX-8 VS. M/S BENGAL FINANCE INVESTMENTS PVT. LTD.', I.T.A.NO.337/2013. It is pertinent to note that in Rolta India Ltd., the Supreme Court was dealing with the issue of chargeability of interest under Section 234B and 234C of the ct on failure to pay advance tax in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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