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TMI Blog2021 (12) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manner as provided under section 14A read with rule 8D of income tax rules. Thus, the issue on hand cannot be rectified in the proceedings initiated under section 154 of the Act being a debatable issue. Hence, we set aside the finding of the learned CIT(A) and direct the AO to delete the addition made by him. Thus the ground of appeal of the assessee is allowed. - ITA No. 1660/AHD/2019 - - - Dated:- 20-12-2021 - Raj Pal Yadav, Vice President And Waseem Ahmed, Member (A) For the Appellant : Mukesh Patel, A.R. For the Respondents : Mohd. Usman, C.I.T., D.R ORDER Per Waseem Ahmed , Accountant Member The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 392.00 while determining the book profit under the provisions of section 115JB of the Act in the assessment framed under section 143(3) r.w.s. 144C(3) of the Act. 3.2. Subsequently, the AO found that total disallowance that is to be made under the provisions of section 14A read with rule 8D of Income Tax Rules stands at ₹ 10,25,89,555.00 but the assessee has Suo-Moto made the disallowance of ₹ 6,27,24,263.00 under normal computation of income which was omitted to be added to the book profit under section 115JB of the Act. Thus, addition for the amount of ₹ 6,27,24,263.00 was to be made under MAT provisions. However, the AO found that there was the need of 100% addition of ₹ 10,25,89,555.00 while determining the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure of ₹ 6,27,24,263/- to earn the exempt income and has made disallowance of the same u/s. 14A in the normal computation of income. However, appellant has not added the same in the book profit as required as per clause (f) of/explanation 1 to section 115JB(2). Appellant contentions that disallowances made u/s. 14A is not to be added while computing book profit is not tenable as High Court in the case of CIT V/s. Alembic Limited lax appeal no. 1249 of 2014 has upheld the suo-moto disallowances as under:-- 94. We have considered the rival submission and we find that similar issue was raised by Revenue as per ground No. 3 above in respect of regular assessment of income and while deciding that ground, we have already uphe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation of Sec. 115JB of the Act independently. But now we are of the view that as there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently, therefore there would be unnecessarily further litigation, if the matter is sent back to the file of AO. 25.9 Thus, considering the peculiar circumstances of the case, we propose to limit the disallowance on an ad-hoc basis for ₹ 5 Lacs as per the clause (f) to Explanation-1 of Sec. 115JB of the Act. Thus the ground of appeal of the Revenue is partly allowed. 4.6 As the appellant itself has computed the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143, or enhance or reduce the amount of refund granted by it under that sub-section. 8.1. The opening words in section 154 of the Act makes it amply clear that this provision has a limited application as it can be invoked only with a view to rectifying any mistake apparent from the record. The apparent mistake refers the mistake which is patent, obvious and whose discovery does not require further investigation. Thus, it is transpired that debatable issues cannot be rectified under the provisions of section 154 of the Act. Now, we need to ascertain whether the issue on hand is debatable issue. In this connection, we find that there are series of judgments of Tribunal and Hon'ble High Courts wherein it was held that the disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly and confirm the addition of ₹ 5 lakh. This ground of Revenue's appeal is partly allowed. 8.3. Moving further, we also note that the Hon'ble Gujarat High Court in the case of PCIT Vs. Nirma chemicals works Ltd. in Appeal No. 28 of 2019 vide order dated 24-06-2019 has upheld the disallowance under clause (f) of section 115JB of the Act on estimated basis and not in the manner as provided under section 14A read with rule 8D of income tax rules. 8.4. It is also pertinent to note that if the disallowance needs to be made while calculating the book profit, the same needs to be made in the manner as provided under clause (f) to Explanation-1 of Sec. 115JB of the Act independently. In holding so, we draw support from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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