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TMI Blog2021 (9) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... AT:- CIT(A), following the order for preceding assessment year i.e., 2014-15, deleted the disallowances. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee s own case. We find, the Tribunal [ 2019 (4) TMI 959 - ITAT DELHI] has dismissed the appeal filed by the Revenue wherein the CIT(A) had deleted 50% of disallowance on account of guest houses - Decided against revenue. Addition being disallowance u/s 14A for the purpose of 115 JB - HELD THAT:- We find, the AO, in the instant case, made addition which was disallowed by him u/s 14A of the Act for computation of the book profit u/s 115JB of the IT Act. We find, the ld.CIT(A), following the orders of his predecessor, deleted the addition being the disallowance u/s 14A of the Act made by the AO for the purpose of section 115JB of the Act. We do not find any infirmity in the order of the CIT(A) on this issue. We find, in the case of Shobha Developers Ltd.[ 2021 (1) TMI 378 - KARNATAKA HIGH COURT] has held that disallowance made u/s 14A could not be added to book profit of the assessee u/s 115JB - Decided ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the order of the AO. He submitted that there cannot be two different views that section 44 is not applicable and section 14A is also not applicable. 8. The ld. counsel for the assessee, on the other hand, submitted that the issue stands decided in favour of the assessee by the consistent decisions of the Tribunal from A.Y. 2000-01 onwards in its own case and the decision of the Hon ble Delhi High Court in assessee s own case i.e., PCIT vs. Oriental Insurance Company Ltd., reported in 273 Taxmann 427. He accordingly submitted that this being a covered matter in favour of the assessee, the ground raised by the Revenue should be dismissed. 9. We have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find, the AO, in the instant case, made addition of ₹ 25,85,81,755/- to the total income of the assessee by invoking the provisions of section 14A r.w.r. 8D. We find, the ld.CIT(A) deleted the addition by following the decision of his predecessor in assessee s own case in the preceding years. We find, the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 44. This necessarily includes the exception provision enshrined under section 14A of the Act. Therefore, in our view, the AO could not have travelled beyond section 44 in the first schedule of the Act. Besides, the tribunal has also invoked the rule of consistency since the same view of the Tribunal has prevailed in respect of the earlier assessment years i.e. 2000-01, 2001-02 and 2005-06. 10. We also do not find merit in the submission of Mr. Sharma that the Tribunal should have remanded back the matter to the Assessing Officer for computation of income of the Respondent-assessee in terms of first schedule of the Act, since that was not even a ground urged by the Revenue before the Tribunal. At this stage, it is too late in the day for the Revenue to argue that notwithstanding the grounds urged to challenge the order of the CIT (A), the Tribunal should have ventured into examining the merits of the computation of income of the Respondent assessee in terms of section 44 read with the first schedule of the Act. No doubt, the Tribunal is a final fact-finding body. However, when the Revenue confined its challenge only in respect of the applicability of section 14A, we can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 10. The learned counsel for the a4sessee pointed out that in assessment year 1999-2000, the Tribunal vide order dated 25.7.2008 in ITA No.4565/ Delhi/2002 has accepted the assessee's contentions, A copy of the said order of the Tribunal is placed at pp, 78 to 82 of the paper book. 11. The learned Departmental Representative, on the other hand, strongly justified the order of the CIT(A), in the light of his discussion in the impugned order. 12. We have carefully considered; the rival contentions and gone through the records, The Tribunal in assessment year 1999- 2000 has held that expenditure incurred for maintenance of the company's own guest houses is covered under section 30(a)(ii) of the Act. Therein the Tribunal accepted the plea of the assessee that in respect of the guest houses owned by the assessee, repair expenses will have to be allowed as deduction under section 30(O)(ii) of the Act. Once the expenditure is allowable under section 30(O)(ii), if the expenditure of incurred on repair and maintenance of guest house taken on lease should also be allowed. In the light of the aforesaid order of the Tribunal, we decide the matter, for the AYs in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Integrated Mining Ltd. vs. DCIT, reported in 67 taxmann.com 260 and the decision of the Hon ble Karnataka High Court in the case of Shobha Developers Ltd. vs. DCIT, reported in 434 ITR 266 (Kar.), he submitted that the issue stands squarely covered in favour of the assessee. 20. We have considered the rival arguments made by both the sides and perused the orders of the authorities below. We find, the AO, in the instant case, made addition of ₹ 25,85,81,755/- which was disallowed by him u/s 14A of the Act for computation of the book profit u/s 115JB of the IT Act. We find, the ld.CIT(A), following the orders of his predecessor, deleted the addition of ₹ 25,85,81,755/- being the disallowance u/s 14A of the Act made by the AO for the purpose of section 115JB of the Act. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the Hon ble Karnataka High Court in the case of Shobha Developers Ltd. (supra) has held that disallowance made u/s 14A could not be added to book profit of the assessee u/s 115JB of the Act. The relevant observations of the Hon ble High Court read as under:- 6. We have considered the submissions made on bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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) are debited to the statement of profit and loss account, then only 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 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 Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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