Case Law Details
ACIT Vs M/s. Ridhi Portfolion (P) Ltd (ITAT Kolkata)
A similar issue relating to addition on account of expenditure disallowed under section 14A while computing book profit under section 115JB of the Act has been decided by the Special Bench of this Tribunal at Delhi in the case of ACIT vs Vireet Investment Pvt. Ltd. (ITA No. 502/Del/2012 dated 16.06.2017) wherein it was held that the expenditure incurred to earn exempt income computed under section 14A of the Act could not be added while computing book profit under section 115JB of the Act. In the case of CIT vs Jayshree Tea Industries Ltd. (ITAT No. 47 of 2014 dated 19.11.20 14), Hon’ble Kolkata High Court has also expressed a similar view by holding that the provision of section 115JB in the matter of computation is a complete code in itself and resort need not and cannot be made to section 14A of the Act. Hon’ble Kolkata High Court has further held that the computation of the amount of expenditure relatable to exempt income of the assessee must be made independently by applying clause (f) of Explanation (1) under section 115JB of the Act where the assessee has not claimed such expenditure to be nil. Respectfully following the said decision of the Hon’ble Jurisdictional High Court in the case of Jayshree Tea Industries Ltd. (supra), we set aside the impugned orders of the Ld. CIT(A) on this issue and restore the matter to the file of the A.O. for computing the amount of expenditure relatable to the exempted income of the assessee independently for all the four years under consideration by applying clause (f) of Explanation (1) under section 115JB of the Act without resorting to section 14A or Rule 8D.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
These four appeals are preferred by the revenue against the four separate orders passed by the Ld. CIT (Appeals) all dated 27th July, 2016 for A.Y. 2010-11, 2011-12, 2012-13 and 2013-14 and since a common issue involved therein, the same have been heard together and are being disposed of by a single consolidated order.
2. The solitary common issue involved in these four appeals of the revenue relates to the deletion by the Ld. CIT(A) of the addition made by the A.O. on account of disallowance of expenditure under section 14A while computing the book profit of the assessee company under section 115JB of the Income Tax Act, 1961.
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