9911796707
TMI Blog2021 (8) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... 19/12/2016 by the ld. Asst. Commissioner of Income Tax-15(2)(1), Mumbai (hereinafter referred to as ld. AO). 2. The ground Nos. 1 and 6 raised by the assessee are general in nature and does not require any specific adjudication. 3. The ground No.3 raised by the assessee was stated to be not pressed by the ld. AR. The same is reckoned as a statement made from Bar and accordingly, the ground No.3 raised by the assessee is dismissed as not pressed. 4. The ground Nos. 2 & 5 raised by the assessee are challenging the disallowance made u/s.14A of the Act r.w.r. 8D(2) of the Rules both under normal provisions of the Act as well as in the computation of book profits u/s. 115JB of the Act respectively. 5. We have heard rival submissions and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments made by the assessee and hence, no disallowance of interest in terms of Rule 8D(2)(ii) of the Rules is warranted, With regard to disallowance made u/s.14A in the computation of book profits u/s.115JB of the Act, the assessee placed reliance on the Special Bench of Delhi Tribunal in the case of ACIT vs. Vireet Investments Pvt. Ltd., reported in 165 ITD 27 wherein it was held that computation mechanism provided in Rule 8D(2) of the Rules cannot be imputed in Clause (f) of Explanation 2 to Section 115JB(2) of the Act for the purpose of making disallowance of expenses incurred for earning exempt income. However, the ld. CIT(A) did not heed to these contentions of the assessee and upheld the disallowance made by the ld. AO. 5.3. We find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Clause (f) of Explanation-2 to Section 115JB(2) of the Act. Hence, only actual expenses incurred by the assessee for the purpose of earning exempt income would be liable for disallowance in terms of Clause (f) referred to thereon. Since, assessee itself, has voluntarily disallowed by identifying actual expenses in the sum of Rs. 3,78,562/- in the computation of book profits u/s.115JB of the Act, the same is hereby directed to be adopted and no further disallowance is warranted thereon. Accordingly, the ground No.2 raised by the assessee is partly allowed and ground No.5 raised by the assessee is allowed. 6. The ground No.4 raised by the assessee is with regard to disallowance made u/s.35(2AB) of the Act in the sum of Rs. 1,07,722/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi. The assessee also submitted a report in Form 3CL approved by the DSIR, New Delhi. We find that the ld. AO on perusal of Form 3CL report observed that recognition has been granted in respect of capital expenditure to the tune of Rs. 20.67 lakhs and Revenue expenses to the tune of Rs. 57.21 lakhs. The total expenditure approved comes to Rs. 77.88 lakhs and that assessee would be effectively eligible for weighted deduction u/s.35(2AB) of the Act only to the extent of Rs. 1,55,76,000/- (Rs. 77,88,000/- * 200%). Since assessee had claimed weighted deduction u/s.35(2AB) of the Act in the sum of Rs. 1,56,82,506/- in the return, the excess sum representing difference of Rs. 1,07,222(Rs. 15,62,506-Rs. 1,55,76,000/-) was sought to be disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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