Case Law Details
Manyata Promoters Pvt. Ltd Vs JCIT (ODS) (ITAT Bangalore)
ITAT Bangalore held that AO cannot go beyond the profits as per profit and loss account prepared in accordance with the Companies Act except in the manner provided in Explanation 1 to section 115JB. therefore the action of the AO to make the adjustment for the disallowance u/s. 14A to the book profits u/s. 115JB is not tenable.
Facts- In the assessment proceedings the AO made a disallowance u/s. 14A for an amount of Rs. 14,49,60,000 and also made an addition of Rs.58,29,802 towards for the difference in the income as per Form 26AS and financials of the assessee.
The assessee noticed from the assessment order that the AO did not give credit to the extent of Rs.4,02,70,802 towards TDS which is claimed by the assessee in the ROI and therefore the assessee filed rectification petition before the AO on 25.01.2020. Subsequently the AO passed an order u/s. 154 dated 26.7.2021 in which he made an adjustment to the book profits u/s. 1 15JB for the amount disallowed u/s. 14A considering the same as a mistake apparent from the record. In the said rectification order the AO did not consider the issue raised by the assessee with regard to short credit of TDS. The assessee filed appeal before the CIT(Appeals) against the order of the AO u/s. 154 raising grounds pertaining to disallowance made to book profits and also short credit of TDS. The CIT(Appeals) gave relief to the assessee for the adjustment made by the AO to the book profits u/s. 115JB. With regard to short credit of TDS, the CIT(Appeals) held that this issue is not arising out of the order passed u/s. 154 which is in appeal before him and therefore dismissed this ground.
Both assessee and revenue has preferred the present appeal.
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