CIT Vs. Bengal Finance & Investments Pvt. Ltd (Bombay High Court)
This Appeal under Section 260A of the Income Tax Act, 1961 (the Act), challenges the order dated 3rd July, 2012 passed by the Income Tax Appellate Tribunal (the Tribunal) for the Assessment Year 2007- 08.
2. The Revenue press the following questions of law for our consideration:
“(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in restoring the issue of dis allowance u/s. 14A to the file of the Assessing to decide afresh in view of the decision of the Honorable Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. [328 ITR 81] without appreciating the fact that the issue of dis allowance u/s. 14A read with Rule 8D, has not reached its finality as the Department has agitated the matter before the Honorable Supreme Court, which is pending for final decision.?
(b) Whether on the facts and in the circumstances of the case, and in law, the ITAT is justified in deleting the addition of Rs. 78,84,387/ under clause (f) of Explanation 1 to Section 115JB relying upon the decision in the case of Goetze (India) Ltd. v/s. CIT (2009) 32 SOT 101 (Del.), which has been followed by ITAT, Mumbai in the cases referred to in para 5 of the impugned order without appreciating that the above decision in the case of Goetze (India) Ltd. was rendered by the ITAT, Delhi Bench on completely distinguishable set of facts, peculiar to the said case?”
3 So far as Question (a) is concerned, we find that the Tribunal has merely followed the decision of this Court in Godrej & Boyce Manufacturing Co. Ltd. v/s. DCIT 328 ITR 81, directing the Assessing Officer to work out the dis allowance on a reasonable basis and not under Rule 8D under the Income Tax Rules for the Assessment Year 2007- 08. The Tribunal has merely followed the decision of the jurisdictional High Court and no fault can be found with the same. Accordingly, no substantial question of law arises in Question (a). Hence dismissed.
4 So far as Question (b) is concerned, the impugned order of the Tribunal followed its decision in M/s. Essar Teleholdings Ltd. v/s. DCIT in ITA No. 3850/Mum/2010 to held that an amount disallowed under Section 14A of the Act cannot be added to arrive at book profit for purposes of Section 115JB of the Act. The Revenue’s Appeal against the order of the Tribunal in M/s. Essar Teleholdings (supra) was dismissed by this Court in Income Tax Appeal No.438 of 2012 rendered on 7th August, 2014. In view of the above, question (b) does not raise any substantial question of law.