RADIANT TRAFIN PVT LTD., MUMBAI V. ITO 3(3)(1), MUMBAI

ITA 1182/MUM/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9223 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 16-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: MAHENDRA GOHEL
• Keywords: Earning of tax free income
• Section: 14A; 115JB

Judgement Text

म ु ंबई ठ “एस एम स ” , म ु ंबई स , स सम! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER सं. 1182/म ु ं/2020 ( %. 2014-15) ITA NO.1182/MUM/2020(A.Y 2014-15) Radiant Trafin Private Limited, 46, Bajaj Bhavan, 4 th Floor, 226, Jamnanal Bajaj Marg, Nariman Point, Mumbai 400 021 PAN: AABCR-2410-D ...... ' /Appellant ब% म Vs. Income Tax Officer – 3(3)(1), Room No.668-b, 6 th Floor, Aaykar Bhavan, M.K.Road, Mumbai 400 020 ..... ( ) /Respondent ' * / Appellant by : Shri Mahendra Gohel ( ) * /Respondent by : Ms. Smita Verma स ु % ई + ) / Date of hearing : 08/09/2021 ,-. + ) / Date of pronouncement : 03/12/2021 श/ ORDER This appeal by the assessee is directed against the order of Commissioner of Income Tax(Appeals)-8, Mumbai [ in short ‘ the CIT(A)’] dated 13/09/2019 for the Assessment Year 2014-15. 2. The solitary issue raised by the assessee in this appeal is against disallowance made u/s 14A r.w.r 8D to arrive at Book Profit u/s. 115JB of the Income Tax Act, 1961 ( in short ‘the Act’). 2 ITA NO.1182/MUM/2020(A.Y 2014-15) 3. Shri. Mahendra Gohel appearing on behalf of the assessee submitted that the assessee is a registered Non-Banking Finance Company. The main source of income of the assessee is interest on loans/inter corporate deposits and dividends. The assessee filed its return of income for Assessment Year 2014-15 declaring total income as Nil after set off of carry forward losses against business income of Rs.1,52,634/-. The income of the assessee was computed under MAT provisions i.e. u/s 115JB of the Act. The Assessing Officer while computing Books Profit added back disallowance of Rs.43,53,036/- u/s 14A r.w.r. 8D. Aggrieved by the method of computing Book Profit u/s. 115JB, the assessee filed appeal before the CIT(A). The CIT(A) upheld the adjustment to Book Profit u/s 115JB of the Act, however, the CIT(A) granted part relief to the assessee by restricting disallowance u/s. 14A of the Act, to the extent of exempt income earned i.e. Rs.9,89,543/-. The ld. Authorized Representative for the assessee submitted that the Special Bench of Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd., 165 ITD 27(Del) has held that computation of book profit u/s 115JB is to be made without resorting to the provisions of section 14A r.w.r. 8D. The ld. Authorized Representative for the assessee further referred to the decision of Hon'ble Bombay High Court in the case of CIT vs. Bengal Finance & Investment Pvt. Ltd. in Income Tax Appeal No.337 of 2013 decided on 10/02/2015 to support his contention that disallowance made u/s 14A r.w.r. 8D cannot be added while computing book profit u/s 115JB of the Act . Thus, the ld. Authorized Representative for the assessee prayed that addition made consequent to computation of book profit u/s 115JB of the Act after adding back disallowance u/s 14A r.w.r. 8D be deleted. 4. On the other hand, Ms. Smita Verma representing the Department vehemently supported the impugned order and prayed for dismissing appeal of the assessee. 5. Submissions made by rival sides heard and orders of authorities below examined. The short point involved in the present appeal is; Whether the provisions 3 ITA NO.1182/MUM/2020(A.Y 2014-15) of section 14A r.w.r. 8D would get attracted while computing Book Profit u/s 115JB of the Act? The answer to the above question is emphatic no in view of the decisions rendered by Hon'ble Bombay High Court in the case of Bengal Finance & Investment Pvt. Ltd. (supra) and Special Bench decision in the case of ACIT vs. Vireet Investment Pvt. Ltd., (supra). Thus, in view of the decisions referred above, the Assessing Officer is directed to disregard disallowance made u/s 14A r.w.r. 8D while computing Book Profit under MAT provisions. 6. In the result, appeal by the assessee is allowed. Order pronounced in the open Court on Friday the 3rd day of December, 2021 Sd/- (VIKAS AWASTHY) स /JUDICIAL MEMBER म ु ंबई/ Mumbai, 0 % ं /Dated 03/12/2021 Vm, Sr. PS (O/S) त ल प अ े षतCopy of the Order forwarded to : 1. '/The Appellant , 2. ( ) / The Respondent. 3. ु 1)( )/ The CIT(A)- 4. ु 1) CIT 5. 2 3 ( ) % , . . ., म ु बंई/DR, ITAT, Mumbai 6. 3 45 6 7 /Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai