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TMI Blog2022 (8) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... of disallowance made by him u/s 14A without appreciating that the provisions of section 115JB are attracted only when there are book profits. "2(a) On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in upholding AO's act of reducing appellant book loss u/s 115JB by sum of Rs. 5,26,23,522/- being amount of premium on convertible debenture offered to tax by appellant. (b). On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in giving a finding that the claim of the aforesaid amount is in the nature of unascertained liability without appreciating that the said amount was never debited to the profit and loss account of the appellant. 3. On the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred appeal before the learned CIT(Appeals). The learned CIT(Appeals) partly allowed the appeal. Thereby he restricted the disallowance u/s 14A to the extent of Rs. 382/-. Further, in respect of excess claim of expenditure on account of premium payable on redemption of compulsorily convertible debentures (CCDs), it is notified by the learned CIT(Appeals) that the assessee acknowledged that this amount was not allowable as expenditure in the year under appeal due to the new accounting standards. Moreover, it was not disputed that expense was not relatable to the income being charged to tax in the year under appeal. Aggrieved against the order of the learned CIT(Appeals), the assessee is in appeal before this Tribunal. 4. Apropos all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ao did not give any finding as to why he is reducing book loss by the amount disallowed in the assessment while determining appellant's income under normal provisions. There was no separate computation u/s 115JB. He simply in the concluding para reduced the amount of book loss by the amount of two disallowances of Rs 21,15,14,527/- made u/s 14A and Rs 5,26,23,522/- on account of premium on redemption of debenture. Kindly refer internal page no 12 of AO's order. CIT(A)'S FINDING -Page 11 para 4 heading Ld. CIT did not give any adjudication on this issue although specific written submissions were made before him. Kindly see PB 1-18. APPELLANTS CONTENTION It is submitted that section 115JB provide methodology for providing altern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub section (1) of section 115B states that in case of assessees income computed by applying normal provisions is less than 18.5% of its book profit than 18.5% of book profits would be deemed to be its total income. This phrase cannot be implemented. Normal income cannot be compared with book loss, therefore by this interpretation section would become in workable. Finally, we would submit that both the adjustment in itself is infructuous as explained below. The disallowance under section 14A has been reduced from Rs 21,15,14,527/- to Rs 382 by the CIT(A). It is noteworthy that department's appeal against Ld. CIT(A) has been dismissed by hon'ble ITAT vide its order dated 08.12.2021 in ITA no. 687l/Del/2018 for AY 2015- 16. Copy of order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure over the tenure of the borrowing. Consequently, it was decided to change the basis of claim by spreading over the premium amount year wise instead of claiming the same in one lumsum at the time of redemption. Consequent to the aforesaid decision premium on redemption amount of Rs 38,82,91.686/-, was claimed as deductible expenditure by way of revise return. While filing subsequent year's return it was noticed that there was error in computation of premium amount last year. Filing of revised return of income had lapsed by that time, left with no alternative during assessment proceedings appellant suo-motto surrendered excess amount of Rs 5,26,23,522/- being premium on redemption of debentures vide letter dated 07.12.2017. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) is erroneous as amount of premium on redemption was never debited to P&L account. This amount was claimed as deduction way of revise return. Had this amount stood debited to P&L a/c question of revising the return would not have arisen? Kindly see the P&L a/c at PB 28,39 & 40. The issue in ground is also erroneous as per our stand in ground no 1 that there is no provision in Income Tax Act for computing or recomputing book loss. In view of above submissions, it is humbly prayed that appellant book loss should be retained at Rs 150,64,75,547/- and AO's act of reducing the same to RS 124,23,37,498/- should be struck down. GROUND NO 3: - INCREASE IN BOOK LOSS BY RS 33,56,68,161/- It is submitted that share premium amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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