The Revenue Tax Appellate Tribunal (ITAT), Chennai held that No disallowance of bills might be made for exempt earnings u/s 14A of The Revenue Tax Act, 1961 and Rule 8D of Revenue Tax Guidelines,1962 whereas computing e-book revenue below Part 115JB of the Revenue Tax Act,1961.
The one concern on this attraction of the assessee, M/s. Sundaram Finance Holdings Restricted is as regards the revision order handed by PCIT u/s. 263 of the Act for re-computing the disallowance of bills relatable to exempt earnings by invoking the provisions of s. 14A of the Act r/w Rule 8D(2) of the Revenue Tax Guidelines, 1962 for computing e-book revenue u/s. 115JB of the Act
The evaluation was accomplished by the ACIT, u/s. 143(3) of the Act, whereby the difficulty of disallowance u/s. 14A of the Act was thought of by the A.O and he labored out the disallowance at Rs. 76.91 Lakhs. Subsequently, the PCIT, on perusal of the revenue and loss account seen from the main points of miscellaneous bills and computation of taxable e-book revenue that no quantity was added in direction of the expenditure incurred to earn the exempt earnings.
In accordance with PCIT, the AO failed to think about the disallowance of Rs. 76.91 Lakhs whereas computing the e-book revenue u/s. 115 JB of the Act and subsequently, he issued present trigger discover to the assessee as to why this quantity of Rs. 76.91 Lakhs be not delivered to tax whereas computing taxable e-book revenue u/s. 115JB of the Act. The assessee replied that the assessee-company has not incurred any bills regarding exempt earnings because the dividend earnings itself was transferred on account of the accepted scheme of demerger by the Nationwide Firm Legislation Tribunal.
The PCIT was not satisfied and in keeping with PCIT, the evaluation order handed by A.O u/s. 143(3) of the Act is inaccurate on this level and subsequently, he directed the A.O to compute the disallowance of bills of Rs. 76.91 Lakhs whereas computing e-book revenue u/s. 115 JB of the Act. Aggrieved, the assessee is in attraction earlier than the Tribunal.
The Bench consisting of Mahavir Singh, Vice President, and Dipak P Ripote, Accountant Member held that” We have now thought of the details and circumstances of the case and gone via all the case legal guidelines and we’re of the view that the difficulty is roofed in favor of the assessee and towards Income that no disallowance of bills might be made in respect of exempt earnings by invoking the provisions of s. 14A of the Act r/w Rule 8D of the Guidelines whereas computing e-book revenue u/s. 115JB of the Act.”
M/s. Sundaram Finance Holdings Restricted vs Asst. Commissioner of Revenue Tax
Counsel for Appellant: Shri R. Vijayaraghavan
Counsel for Respondent: Shri M. Rajan
CITATION: 2022 TAXSCAN (ITAT) 1314