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TMI Blog2023 (4) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... A HIGH COURT] pointed out that it has always been understood that income includes loss, as held in CIT v. Harprasad Co. (P) Ltd. [ 1975 (2) TMI 2 - SUPREME COURT] . So that reduction in loss by way of positive adjustments, i.e amount to be added back if debited to Profit and Loss Account, like in case in hand, disallowance u/s14A of the Act is made, then word net profit as shown in the profit loss account for the relevant previous year would include the loss shown in the return. Thus, there is no substance in this argument or grounds raised in that regard and ground no 3 to 6 are decided against the assessee. Nature of investments to arrive at exempt income - Disallowance u/s 14A c annot exceed the exempt income earned durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit note an applicability of Section 14A of the Act. Assessee had claimed that assessee had made investments in current as well as non-current investments and the non-current investments were not considered for computing disallowance. It was submitted that company had earned Rs. 13,52,493/- on current investments out of which Rs. 1,59,826/- is dividend on investments in Reliance liquidity fund daily dividend option reinvestment plan and Rs. 11,92,668/- is profit on sale of investment on Reliance liquidity fund growth option plan. While preparing the computation of total income Rs. 11,92,668/- is already offered for taxation under head Short term capital gain and Rs. 1,59,826/- is considered as exempt income u/s 10(34) of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to disallowance u/s 14A for the purpose of Section 115JB of the Act which has been sustained by Ld. CIT(A) however, restricting the disallowance to Rs. 1,59,826/-. 4. Revenue is in appeal raising following grounds :- 1. Whether the Ld. CIT(A) is justified on facts and law in restricting the disallowances under section 14A of the Act, from which Rs. 4,75,45,434/- to Rs. 1,59,826/- by not considering a legal principle that allowability/disallowability of expenditure under the Act is not conditional upon the earning of the income as held by Hon ble Supreme Court in the case of CIT vs Rajendra Prasad Moody (1978) 115 ITR 519? 2. Whether CIT(A) is justified on facts and law restricting the disallowance made under section 14A ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 115JB, when the section applies to assessee having book profits. 4. On the facts and circumstances of the case and in law the Id. CIT (A) has erred in upholding AO s act of recomputing audited book loss when he has no power to do so. 5. On the facts and circumstances of the case and in law the Id. CIT (A) has erred in upholding AO s act of reducing appellant book loss by sum of Rs. 15,59,42,068/- being the amount of genuine and ascertained expenditure on redemption premium on CCD by holding the same to be an unascertained liability. 6. On the facts and circumstances of the case and in law the Id. CIT (A) has erred in holding that sum of Rs. 1,59,826/- held by him to be disallowed u/s 14A while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch is not impressesd. As a matter of law, income or profits and gains should be understood as including loss also so that 'profits and gains' represents positive income, whereas 'loss' represents negative income. Reliance for it can be placed on Atul Kumar Deovrat Co. v. CIT (1987) 168 ITR 286 (Cal). Further, in P.R. Basavappa Sons v. CIT; (2000) 243 ITR 776 (Kar), the Hon ble High Court pointed out that it has always been understood that income includes loss, as held in CIT v. Harprasad Co. (P) Ltd. (1975) 99 ITR 118 (SC). So that reduction in loss by way of positive adjustments, i.e amount to be added back if debited to Profit and Loss Account, like in case in hand, disallowance u/s14A of the Act is made, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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