Section 14A Disallowance Whilst Computing Book Profits U/s 115JA/JB: ITAT Delhi & Mumbai

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Mon, Mar 26, 2012 at 2:01 PM
Subject: Message from EGroup of SolapurCAs No S. 14A Disallowance Whilst Computing Book Profits U/s 115JA/JB: ITAT Delhi & Mumbai
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Quippo Telecom Infrastructure Ltd vs. ACIT (ITAT Delhi)

In computing book profits u/s 115JA/JB, if actual expenditure to earn tax-free income not debited in P&L A/c, s. 14A cannot apply

 

For AY 2007-08, the assessee invested Rs. 10 crores in shares and units. The assessee claimed that it had incurred no expenditure to earn tax-free income though the AO & CIT (A) made a disallowance of Rs. 19.58 lakhs u/s 14A r.w. Rule 8D. Before the Tribunal, the assessee claimed that (i) Rule 8D could not apply to AY 2007-08 and (ii) No disallowance u/s 14A could be made for purposes of computing book profits u/s 115JB. HELD by the Tribunal:

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Regards,

Editor,