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TMI Blog2021 (4) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, in the case of Apollo Tyres vs. CIT [ 2002 (5) TMI 5 - SUPREME COURT] the same is not applicable because in that case, the books of accounts of assessee are prepared in accordance with Part II and III of Schedule VI to the Companies Act and under those facts, the Hon ble Supreme Court held that once books of accounts are in accordance with Companies Act and approved by the Board, then the AO has no jurisdiction to go behind net profit shown in profit and loss account except to extent provided in Explanation to section 115J of the Act. Hence, we reject arguments of the assessee and confirm addition made by the AO towards income not reported in books to book profit computed u/s.115JB of the Act. Disallowance of expenditure u/s.14A to book profit computed u/s.115JB of the Act - HELD THAT:- We find that ITAT, Special Bench of Delhi in the case of ACIT vs. Vireet Investments (P) Ltd.,[ 2017 (6) TMI 1124 - ITAT DELHI] held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without restoring to computation as contemplated u/s.14A r.w.rule 8D of Income Tax Rules, 1962. The Hon ble Madras High Court in the case of CIT vs. Shriram Own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corp. P. Ltd.,[ 1986 (3) TMI 3 - SUPREME COURT] . In this case, assessee has filed all possible evidences to prove loan but the AO has disregarded evidences filed by the assessee and made addition only on the ground of receipt of loan by cash. Therefore, we are of considered view that the AO is erred in making addition towards unsecured loan received from Shri R. Muthaiyah - Hence, we direct the AO to delete addition made u/s.68. Levy of penalty u/s.271(1)(c) - addition made towards unexplained cash credit u/s.68 - HELD THAT:- We find that in quantum appeal filed by the assessee, addition made by the AO towards unexplained cash credit has been deleted. Therefore, once addition on which penalty levied u/s.271(1)(c) of the Act was deleted, then penalty levied on said addition cannot survive under law. Therefore, penalty levied by the AO u/s.271(1)(c) of the Act is not sustainable under law and hence, the AO is directed to delete penalty levied u/s.271(1)(c) of the Act. - ITA Nos. 730, 731 & 732/CHNY/2018 - - - Dated:- 21-4-2021 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Appellant by : Shri I. Dinesh, Advocate Respondent by : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not included in books of accounts of the assessee. It was the contention of the assessee before the AO, that amount received from M/s. Shell India Markets Pvt. Ltd., relates to maintenance paid directly to M/s. Jayant Tech Park Owners Association and hence, not recognized in the books of assessee. 3.1. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The AO has made addition towards amount received from M/s. Shell India Markets Pvt. Ltd., as per Form No.26AS, on the ground that said amount was not reported in the books of accounts of the assessee. The assessee claims that said payment was directly paid to M/s. Jayant Tech Park Owners Association for maintenance and it is not its income and hence, not recognized in the books of the assessee. The AO however has not accepted explanation offered by the assessee and according to him, when credit for TDS is taken, corresponding income needs to be offered to tax and accordingly made addition to total income of the assessee. Since book profit computed u/s.115JB of the Act is higher than income computed under normal provisions of the Act, the AO has made add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned total disallowance of ₹ 4,84,571/-. The AO has also made addition towards disallowance of expenditure u/s.14A to book profit computed u/s.115JB of the Act. 4.2 We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The ld.AR for the assessee submitted that the issue is squarely covered in favour of assessee by series of orders of Courts and Tribunal, wherein it was held that computation under clause (f) of Explanation 1 to Section 115JB(2) is to be made without resorting to computation as contemplated u/s.14A r.w.rule 8D of Income Tax Rules, 1962. We find that ITAT, Special Bench of Delhi in the case of ACIT vs. Vireet Investments (P) Ltd., (2017) 82 taxman.com 415 held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without restoring to computation as contemplated u/s.14A r.w.rule 8D of Income Tax Rules, 1962. The Hon ble Madras High Court in the case of CIT vs. Shriram Ownership Trust, (2020) 122 taxmann.com 155 has considered an identical issue and held that no addition could be made to book profit in respect of disallowance of expenditure u/s.14A r.w.rule 8D of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the contention of assessee before the AO that expenditure incurred towards transportation of assets, files and other administrative records is revenue in nature, which does not give enduring benefit to the assessee. 7.1 We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Having heard both sides, we ourselves do not agree with the reasons given by the AO to disallow transportation expenses incurred for shifting factory from one site to another site, because transportation expenses incurred for shifting factory from one place to another place does not give any enduring benefit to the assessee and hence, the same cannot be treated as capital in nature. Hence, we direct the AO to delete addition made towards disallowance of factory shifting expenditure. 8. The next issue that came up for our consideration from Ground No.2 of assessee appeal is addition of ₹ 1,50,000/- towards loan received from Shri Muthaiyah, Director of assessee company u/s.68 of the Act. 8.1 The AO has made addition of ₹ 1,50,000/- on the ground that assessee has failed to explain the credit in the current account of State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The reasons given by us in preceding para No. 4.2 in assessee s own case for assessment year 2010-11 shall mutatis mutandis apply to this appeal as well. Therefore, for similar reasons we direct the AO to delete addition made towards disallowance u/s.14A to book profit computed u/s.115JB of the Act. 10. In the result, the appeal filed by the assessee for assessment year 2012-13 in ITA No.731/Chny/2018 is allowed. ITA No.732/Chny/2018, Assessment year 2012-13 11. The assessee has raised the following grounds of appeal:- 1. The Commissioner of Income Tax (Appeals) has not appreciated the fact that The Assessing Officer had made an addition of₹ 1,50,000 by treating the amount directly credited by one the Directors by cash in the current account of the appellant. The explanation that the Director was an assessee in the same jurisdiction and the books of accounts of the Director filed with the Assessing Officer reflected the entry was no considered by the Commissioner of Income Tax. 2. Explanation to Section 27 1(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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