Case Law Details
Adani Properties Pvt. Ltd Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that the disallowances made under section 14A read with rule 8D cannot be the subject matter of disallowances while determining the net profit u/s 115JB of the Income Tax Act.
Facts-
The assessee is a private limited company and engaged in the activity of letting out and/or, leasing of immovable properties and in wholesale trading of the commodities. The assessee in the year under consideration has declared exempted income of Rs. 33.52 crores only. However, the assessee has not made any disallowance of the expenses against such exempted income as mandated under the provisions of section 14A of the Act. Thus, the AO invoked the provisions of rule 8D of Income Tax Rule and worked out the amount to be disallowed on account of administrative expenses at Rs. 15,82,69,483/- only. However, the AO found that the total administrative expenses claimed by the assessee in the financial statement stands at Rs.9,87,19,946/- and therefore the AO restricted the disallowance at Rs.9,87,19,946/- only by making addition to the total income of the assessee.
AO, further, while computing the income under the head MAT in pursuance to the provisions of section 115 JB of the Act has also considered the impugned amount of disallowance made while calculating the income under the normal head of income. As such, the AO has also made disallowance of the impugned amount of Rs.9,87,19,946/- while calculating the book profit under section 115JB of the Act.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
