ACIT, LTU, New Delhi V. The Oriental Insurance Co. Ltd., New Delhi

ITA 5723/DEL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6854 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 04-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Question of law; Commercial expediency; Rule 8D; Set aside
• Section: 37; 28; 43B; 234B; 14A; 115JB; 13; 22

Judgement Text

Page 1 of 19 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER I.T.A No. 5723/Del/2018 (ASSESSMENT YEAR: 2014-15) ACIT NBCC Plaza, Pushap Vihar, Sector-5, New Delhi Vs. The Oriental Insurance Co. Ltd. A-25/27, Asaf Ali Road, New Delhi AAACT0627R (Appellant) (Respondent) Appellant By Sh. Tarandeep Singh Adv & Sh. Pulkit Verma, Adv Respondent by Shri H. K. Chaudhary, CIT (DR) Date of Hearing 01.12.2021 Date of Pronouncement 07.12.2021 Hearing conducted via Webex ORDER PER DIVA SINGH, J.M. The present appeal has been filed by the assessee, wherein the correctness of the order dated 29/06/2018 of CIT(A)-22, New Delhi, pertaining to assessment year 2014-15 is assailed on the following grounds. “1. On the facts and the circumstances of the case and in law, Ld. CIT (A) has erred in deleting the addition of Rs.52,47,60,480/- made by the AO u/s 14A of the I.T. Act. 2. On the facts and the circumstances of the case and in law, Ld. CIT (A) has erred in deleting 50% disallowance Page 2 of 19 amounting to Rs.64,01,238/- on account of expenses incurred on Guest House made by the AO. 3. On the facts and the circumstances of the case and in law, Ld. CIT (A) has erred in deleting an addition of Rs.52,47,60,480/- being disallowance made u/s 14A of the I.T. Act by the A.O. for the purpose of 115 JB of the Act. 2. At the time of hearing the Ld. Counsel Mr. Tarandeep and Mr. Pulkit Verma, appearing on behalf of the assessee submitted that all the above issues are fully covered in favour of the assessee. It was his submission that relief has been granted by the Ld.CIT (A) considering the past history of the assessee itself. Specific attention was drawn to the order dated 24/9/2021 pertaining to 2015-16. Referring to the synopsis filed it was his submission that each of these issues stand fully covered. Hence, it was his prayer that the Department’s appeal may be dismissed. 3. Since, the present appeal has been filed by the Revenue Mr. H. K. Chaudhary, CIT (DR) appearing for the Revenue was required to make his submissions. 4. The Ld. CIT DR submitted that the submissions of the Ld. AR in as much as the same issues have been considered by the ITAT in assessee’s own case in the earlier and subsequent assessment years is correct. However, it was his prayer that since on some of the issues the Department is in appeal before the Hon'ble High Court accordingly he would want it be recorded that he is reiterating the submissions advanced before the Co-ordinate Bench by him in ITA 5834 of 2015-16 Assessment Year. The ITAT it was submitted has not agreed with his submissions in the foresaid order dated 24/9/2021. Hence he would want to keep the issue alive. As on one hand Section 44 is relied upon and on the other that addition also not maintainable under Section 14A. However, since today, the order of the ITAT is available, he would just want this specific objection to be noticed for keeping the issue alive before the Page 3 of 19 Hon'ble High Court. Specific attention was drawn to the Departmental objection noted in Para 7 of the aforesaid order. 5. Both the sides accordingly took the position that subject to the above departmental position the issues are covered in assessee’s favour. 6. We have heard the parties the assessee in the facts of the present case it is seen is a Public Sector Undertaking of Government of India and is in the business of Non Life Insurance. The assessee offers insurance covers for large projects like power plants, petrochemical, steel and chemical plants. It also offers various insurance products like Motor Policies, Health-Medi-claim/ Overseas Medi claim/ Personal Accident; Motor Vehicle, Agriculture/ Sericulture / Poultry, Aviation, Marine and other miscellaneous policies.” 7. The first issue for consideration in the present departmental appeal it is seen is the deletion of the addition made by the A.O u/s 14A by way of disallowance of Rs. 52,47,60,480/-. The facts relatable thereto are set out by him at Pages 13 to 18 of the assessment order. A perusal of the same shows that the Assessing Officer was conscious of the relief granted to the assessee on identical sets of facts and circumstances right up to 2005-06 Assessment Year. However, in order to keep the issue alive he made the addition taking note of the fact that the challenge of the Revenue before the Hon'ble High Court in 2000-01 and 2001-02 Assessment Year failed on the account of lack of approval of the Committee on Dispute. (COD). He noted that:- “However, with due respect and regards to the Hon’ble Delhi High Court, it is noted that in A.Y. 2000-01 and 2001- an appeal was filed before the Hon’ble High Court and the Hon’ble High Court vide its orders dated 22.01.2010 in ITA No. 76/2010 and 54/2010 has stated that “The approval of the Committee on Disputes has not yet be taken. Consequently, we decline to entertain this appeal. However, the appellant has applied for Page 4 of 19 approval of the Committee on Disputes. In case the Committee on Disputes grants approval, the Revenue would be at liberty to file a fresh appeal within 15 days of the appellant receiving the order granting approval. This appeal stands disposed of in these terms”. 9. This issue was carried in appeal by the assessee before the CIT(A) before whom the following submissions are found to have been advanced: “ 3.1 The learned Assessing Officer has disallowed a sum of Rs. 52,47,60,480/- by involving the provisions of section 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962 assuming that the said expenditure must have been incurred for earning exempt income. In this context it is submitted that the income of the appellant is to be computed u/s. 44 read with Rule 5 of schedule 1 of the Income Tax Act, 1961. Section 4*4 is a non-obstante clause and applies notwithstanding anything to the contrary contained within the provisions of the Income-tax Act relating to computation, of income chargeable under different heads. For computation of profits and gains of business or profession the mandate is to compute the said income in accordance with the provisions of sections 28 to 43B of the Act. In the case of the computation of profits and gain of any business of insurance, the same shall be done in accordance with the rules prescribed in First Schedule of the Act, meaning thereby section 28 to 43B shall not apply. No other provision pertaining to computation of income will become relevant. Page 5 of 19 Thus, for computing income of insurance business, no head- wise bifurcation is called for. The income, inter alia, of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished to the controller of Insurance under the Insurance Act, 1938. The said balance of profits is subject only to adjustments there under. The adjustments do not refer to disallowance under section 14A of the Act. Section 44 creates a specific exception to the applicability of sections 28 to 43B. Therefore, the purpose, object and purview of section 14A have no applicability to the profits and gains of an insurance business. For the said proposition reliance is placed on ITAT decision in appellant’s own case, wherein the Hon’ble Delhi Bench of the ITAT vide their order ITA NO. 5462 & 5463/Del/03 dated 27.02.2009for A.Ys. 2000-01 & 2001-02, have held as under.- “23. The above provision makes it very clear that section 44 applies notwithstanding anything to the contrary contained within the provisions of the Income Tax act relating to computation of income chargeable under different heads. We agree with the learned counsel that there is no requirement of head wise bifurcation called for while computing the income u/s. 44 of the Act in the case of an insurance company. The income of the business of insurance is essentially to be at the amount of balance of profit disclosed by the annual accounts as furnished to the controller of insurance. The actual computation of profits & gains of insurance business will have to be computed in accordance with Rule 5 of the First schedule. In the light of these special provisions coupled with non-obstante clause the AO is not permitted to travel beyond these provisions. Page 6 of 19 “24. Section 14A contemplates an exception for deduction as allowable under the .Act are those contained u/s. 28 to 43B of the act. Section 44 creates special application of these provisions in the cases of insurance companies. We, therefore, agree with the assessee and delete the disallowance made by the AO which is based on the application of 14A of the Act as according to us, it is not permissible to the AO to travel beyond section 44 and first Schedule of the Income Tax Act." 3.2 Further in the assessee’s own case for AY 2005-06 vide Appeal Number ITA- 4786/DEL/2012 and TTA-4493/ DEL/ 2012 the Income Tax Appellate Tribunal decided the appeal in favor of the assessee and held that “it is not permissible for the AO to travel beyond the section 44 and the first schedule of Income tax Act and accordingly ordered for deleting the disallowance made by AO based upon the application of section 14A. of the act”. 10. A perusal of the above shows that considering the past position on this issue the CIT(A) deleted the addition in Para 6.2 which is under challenge in the present proceedings. 11. The Ld. CIT DR has reiterated his objection as canvassed on identical issues in Revenue’s appeal in ITA No. 5834/Del/2018 (2015-16 Assessment Year) order dated 24/9/2021. For the sake of completeness it is reproduced hereunder:- “ 7. The Ld. DR heavily relied on the order of the A.O. He submitted that there cannot be two different views that Section 44 is not applicable and Section 14A is also not applicable.” Page 7 of 19 12. It is seen that this issue was considered by the Coordinate Bench relying on the past position. For the sake of completeness the relevant finding referred to by the parties is reproduced hereunder:- “9. We have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find, the AO, in the instant case, made addition of Rs.25,85,81,755/- to the total income of the assessee by invoking the provisions of section 1.4A r.w.r. 8D. We find, the ld.CIT(A) deleted the addition by following the decision of his predecessor in assessee0s own case in the preceding years. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee0s own case in various assessment years starting from A.Y. 2000-01 and onwards. We find, the Hon0ble Delhi High Court has dismissed the appeal filed by the Revenue in assessee’s own case where the Tribunal had held that in view of the provisions of section 44 r.w. the First Schedule, the provisions of section 14A are to be excluded in relation to computation of income of an insurance company. The relevant observations of the Hon’ble High Court at para 9 and 10 of the order reads as under:- 69. We have heard learned counsels and are of the view that no substantial question of law arises for our consideration. The Tribunal has interpreted section 44 read with the first schedule and concluded that applicability of section 14A is excluded in relation to computation of income of an insurance company. We have examined the relevant provisions, section 44 begins with a non-obstante clause and overrides the other provisions of the Act as mentioned therein including section 14A. We are not convinced with the submission of Mr. Ajit Sharma that section 14A would be Page 8 of 19 applicable in respect of the Respondent. Section 14A does not have independent legs to stand on. Section 14A inter alia begins with the words '[for the purposes of computing the total income under this chapter, no deduction shall be allowed in respect of expenditure incurred i...o. The chapter in question is chapter IV. This chapter also contains the provisions relating to computation of profits and gains of business or profession. Section 44 specifically excludes the provisions of the Act relating to computation of income, inter alia, those contained in "Section 28 to 43B". Thus, the exclusion would take within its sweep section 14A which is an exemption for deductions as allowable under the Act, as provided under section 28 to 43B. Further, section 44 is a special provision applicable in the cases of insurance companies and applies, notwithstanding anything to the contrary contained in the provisions of the Income-tax Act relating to the computation of income chargeable under different heads. For’ computing the profits and gains of the business of insurance company, the AO had to resort to section 44 and the prescribed rules, and could not have applied section 28 to 43B, since the same were excluded from the purview of section 44. This necessarily includes the exception provision enshrined under section 14A of the Act. Therefore, in our view, the AO could not have travelled beyond section 44 in the first schedule of the Act. Besides, the tribunal has also invoked the rule of consistency since the same view of the Tribunal has prevailed in respect of the earlier assessment years i.e. 2000-01, 2001-02 and 2005- 06. 10. We also do not find merit in the submission of Mr. Sharma that the Tribunal should have remanded back the matter to the Assessing Officer for computation of income of the Respondent-assessee in terms of first schedule of the Act, since Page 9 of 19 that was not even a ground urged by the Revenue before the Tribunal. At this stage, it is too late in the day for the Revenue to argue that notwithstanding the grounds urged to challenge the order of the CIT (A), the Tribunal should have ventured into examining the merits of the computation of income of the Respondent assessee in terms of section 44 read with the first schedule of the Act. No doubt, the Tribunal is a final fact-finding body. However, when the Revenue, confined its challenge only in respect of the applicability of section 14A, we cannot find fault in the impugned order, on the basis of submissions not advanced before the Tribunal. We, therefore do not find any substantial question of law arising in relation to the view taken by the Tribunal.” 13. On a reading of the above considering the facts that no change in position of law or facts has been referred to by the parties to canvass that a contrary view be taken, we hold that the Departmental Ground accordingly has to be dismissed. 14. The next issue agitated by the Revenue in the present proceedings is found addressed in Page 18 to 22 of the assessment order. 15. It is seen that the A.O vide Paras 7 to 7.4, takes note of the fact that the assessee was using 26 guest houses out of which 13 were leased premises and had claimed aggregate expenditure of Rs.1,28,02,475/- for the maintenance and upkeep of these guest houses. 50% disallowance was made by the Assessing Officer taking note of the past factual position on these issues even though on similar set of facts and circumstances, ultimately the entire expenditure stood allowed in assessee’s favour. The Assessing Officer again referring to the aforesaid position wherein for lack of approval of the Community on Dispute the issue was not examined by the Hon'ble High Court concluded that the issues had not attained a finality. The addition thus stood made for the following reasons:- Page 10 of 19 “7.4 Therefore, since the matter has not been finally concluded on merit, the contention of the assessee is found to be not acceptable. Therefore, 50% of the total expenditure on Guest Houses amounting to f 64,01,238/- is held to be non-business and inadmissible nature and is therefore disallowed. Penalty u/s 271 (1) (c) is initiated for furnishing of inaccurate particulars of income and concealment of the particulars of income. 15. The assessee carried the issue in appeal before the First Appellate Authority. Before the said authority the following submission on facts are found to have been advance. These are reproduced as under:- 4.0 “Reg. Ground of Appeal No. 4: The learned Assessing Officer has disallowed a sum of Rs.64,01,238/- being 50% of the total guest house expenses amounting to Rs. 1,28,02,476/- claimed by the appellant in the return of income as legitimate business expenses. The learned Assessing Officer has treated 50% of the total expenditure on guest houses as non-business and hence inadmissible. It is submitted that the guest houses were used in connection with the business of the appellant. The appellant is totally responsible for the repairs, upkeep and maintenance including minor repairs, electricity charges, electrical fittings, salary and wages to the caretakers of both owned and rented guest houses. It is submitted that the monthly rent, is very low as compared to the prevailing market rent and thus the landlords had no intention to carry out the necessary repairs. The appellant has incurred the said expenses out of business necessity and commercial expediency. It is not the case of the learned Assessing Officer that such expenses are non-genuine or not at all incurred. The said expenses being Page 11 of 19 legitimately incurred are therefore entitled to deduction under Section 30/Section 37 of the Income Tax Act, 1961. Thus, it can be concluded from the above that the Assessing Officer has made the disallowances purely on assumptions. Similar issue has been decided in appellant’s favor in its own case by the Hon’ble ITAT, New Delhi for Assessment Years 1999-00 to 2004-05. 4.1 Further in assessee own case for AY 2005-06 vide Appeal Number:-ITA/4786/ DEL/ 2012 and TTA- 4493/DEL/2012 The Income Tax Appellate Tribunal decided the appeal in favor of the assessee and held that “once the expenditure is allowable under section 30(o) (iz), if the expenditure incurred on repair and maintenance of guest house taken on lease should also be allowed”. Further the above around stands covered by the decision pronounced by the Honorable High Court in the favor of the assessee vide order dated 18.09.2015 ITA 448/2015. Consequent to which the above additions were stand deleted.” 16. The CIT(A) it is seen following the order for 13-14 Assessment Year deleted the addition. 17. Before us, it has been argued that consistently all along the relief granted has been confirmed by the ITAT and in-fact in the latest order for Assessment Year 2015-16(Supra ITA No. 5834/Del) also similar relief has been confirmed. For ready reference the relevant finding to which our attention has been invited to by the parties is reproduced hereunder:- Page 12 of 19 “12. After hearing both the sides, we find, the assessee, during the impugned assessment year has claimed an aggregate expenditure of Rs. l,57,60,518/- on the maintenance and upkeep of the guest houses. The AO asked the assessee to explain as to why 50% of the expenses should not be disallowed as was disallowed in similar circumstances in earlier years. Rejecting the various explanations given by the assessee, the AO disallowed an amount of Rs.78,80,259/- being 50% of such expenditure on guest houses. We find, the Id.CIT(A), following the order for preceding assessment year i.e., 2014-15, deleted the disallowances. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee0s own case. We find, the Tribunal, vide ITA No.485/Del/2016, order dated 25 th February, 2015 for A.Y. 2011-12, has dismissed the appeal filed by the Revenue wherein the CIT(A) had deleted 50% of disallowance on account of guest houses by observing as under: 10. The Id. CIT (A) deleted 50% of the disallowance of Rs.47,43,236/- made by the AO on account of expenses incurred on guest house repairing. Again, it is brought to our notice by the Id. AR for the assessee that this issue has already been decided in favour of the assessee by the coordinate Bench of the Tribunal right from AYs 2001-02 to 2005-06. Coordinate Bench of the Tribunal in AY 2005-06 determined this issue in favour of the assessee by following the order of AY 2000-01 and 2001-02 in assessee's own case by returning following findings :- "10. The learned counsel for the assessee pointed out that in assessment year 1999-2000, the Tribunal vide Page 13 of 19 order dated 25.7.2008 in ITA No.4565/ Delhi/2002 has accepted the assessee's contentions, A copy of the said order of the Tribunal is placed at pp, 78 to 82 of the paper book. 11. The learned Departmental Representative, on the other hand, strongly justified the order of the C1T(A), in the light of his discussion in the impugned order. 12. We have carefully considered; the rival contentions and gone through the records, The Tribunal in assessment year 1999- 2000 has held that expenditure incurred for maintenance of the company ’ s own' guest houses is covered under section 30(a)(ii) of the Act. Therein the Tribunal accepted the plea of the assessee that in respect of the guest houses owned by the assessee, repair expenses will have to be allowed as deduction under section 30(O)(ii) of the Act. Once the expenditure is allowable under section 30(O)(ii), if the expenditure of incurred on repair and maintenance of guest house taken on lease should also be allowed. In the light of the aforesaid order of the Tribunal, we decide the matter, for the AYs in question, in favour of the assessee." 11. So, following the decision rendered by the coordinate Bench of the Tribunal, we are of the considered view that when the expenditure incurred by the assessee company for maintenance of company's own guest houses, the same is covered u/s 30(a)(ii) of the Act. The repair expenses thereof would also be allowed as deduction as section 30(a)(ii) of the Act. So, we find no ground to interfere with the findings returned by the Id. CIT (A) and consequently ground Page 14 of 19 no.2 is determined against the Revenue. 13. Respectfully following the consistent decisions of the Tribunal in assessee’s own case in the preceding years on this issue, we do not find any infirmity in the order of the CIT(A) in deleting 50% disallowance of guest house expenses. Ground of appeal No.2 by the Revenue is accordingly dismissed. 18. We find that since no argument canvassing contrary view has been advance by the Revenue relying on the assessee’s own past history on the issue we dismiss the ground. 19. For the next challenge posed by the Revenue, the relevant discussion in the assessment order is at Para 10 Page 25. The assessee carried the issue in appeal before the First Appellate Authority before whom the following grounds were raised:- 6 (a) For the purpose of calculating “Book Profits” u/s 15JB, expenditure incurred for earning income u/s 10(38) is deductible, and 6(b) Method of computation of disallowance prescribed under Rule 8D is not applicable while computing “Book Profits” u/s 115JB. 20. The record shows that in support of the said ground, following arguments were advanced on behalf of the assessee before the CIT(A). “ 6.1 Without prejudice to the above, we have to submit that the learned Assessing Officer has added a sum of Rs. 52,47,60,480/- being disallowance made under section 14A r.w.r 8D to the book profits calculated under section 115 JB for the levy of Minimum Alternate Tax (MAT) without appreciating that: (a) for the purpose of calculating “Book Profits” u/s 115JB, Page 15 of 19 expenditure incurred for earning income exempt u/s 10(38) is deductible, and (b) Method of computation of disallowance prescribed under rule 8D is not applicable while computing “Book Profits” u/s 115JB. 21. Considering these submissions the addition was deleted. This decision is challenged by the Revenue in the present appeal. 22. It is seen that this issue has also come up before the ITAT where upon considering the submissions the addition was deleted by the Coordinate Bench vide its order dated 24 th September, 2021. The relevant discussion in Paras 18 to 21 of this order is extracted hereunder for completeness:- “18. The ld. Counsel for the assessee, on the other hand, while supporting the order of the CIT(A), submitted that the AO made the disallowance u/s 14A r.w. Rule 8D while computing the book profit u/s 115JB without appreciating the following two issues :- (i) Method of computation of disallowance prescribed under Rule 8D is not applicable while computing Book Profit u/s 115JB. (b)Provisions of sub-section (2) and (3) of Section 14A cannot be imported into clause (f) of Explanation to section 115JA while computing adjusted book profit. 19. Referring to the decision of the Tribunal in the case of Goetze (India) Ltd. vs. CIT, reported in 32 SOT 101 (Del), the decision of Kolkata Bench of the Tribunal in the case of Integrated Mining Ltd. vs. DCIT, reported in 67 taxmann.com 260 and the decision of the Hon0ble Karnataka High Court in the case of Shobha Developers Ltd. vs. DCIT, reported in 434 ITR 266 (Kar.), he submitted that the issue stands squarely Page 16 of 19 covered in favour of the assessee. 20. We have considered the rival arguments made by both the sides and perused the orders of the authorities below. We find, the AO, in the instant case, made addition of Rs.25,85,81,755/- which was disallowed by him u/s 14A of the Act for computation of the book profit u/s 115JB of the IT Act. We find, the ld.CIT(A), following the orders of his predecessor, deleted the addition of Rs.25,85,81,755/- being the disallowance u/s 14A of the Act made by the AO for the purpose of section 115JB of the Act. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the Hon0ble Karnataka High Court in the case of Shobha Developers Ltd. (supra) has held that disallowance made u/s 14A could not be added to book profit of the assessee u/s 115JB of the Act. The relevant observations of the Hon0ble High Court read as under:- 6. We have considered the submissions made on both sides and have perused the record. Before proceeding further, it is apposite to take note of relevant extract of Section 115JB of the Act. which reeds as under: 115JB. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012, is less than eighteen and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income- tax at the rate of eighteen and one-half per cent. Page 17 of 19 (f) the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply; or (i) the amount or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (i) is debited to the statement of profit and loss or if any amount referred to in clause (j) is not credited to the statement of profit and loss, and as reduced by,— (i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the statement of profit and loss), if any such amount is credited to the statement of profit and loss: (5) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, -mentioned in' this section: 7. Thus from perusal of the relevant extract of Section 115JB, it is evident that Sub-Section (1) of Section 115JB provides the mode of computation of the total income of the assessee and tax payable on the assessee under Section 115JB of the Act. Sub- Section (5) of Section 115JB provides that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee being a company mentioned in this Section. Therefore, any expenditure relatable to earning of income exempt under Section 10(2A) and Section 10(35) of the Act is disallowed under Section 14A of the Act and is added back to book profit under clause (f) of Section 115JB of the Act, the same would amount to doing violence with the statutory provision viz., Sub-Section (1) and (5) of Section 115JB of the Act. It is also pertinent to mention here that the amounts mentioned in clauses (a) to (i) of explanation to Section Page 18 of 19 115JB(2)are debited to the statement of profit and loss account, then only the provisions of Section 115JB would apply. The disallowance under Section 14A of the Act is a notional disallowance and therefore, by taking recourse to Section 14Aof the Act, the amount cannot be added back to book profit under clause (f) of Section 115JB of the Act. It is also pertinent to mention here that similar view, which has been taken by this court in GokeMas Images (P) Ltd. supra was also taken by High Court of Bombay in THE COMMISSIONER OF INCOME TAX-8 VS. M/S BENGAL FINANCE & INVESTMENTS PVT. LTD.', l.T.A.NO.337/2013. It is pertinent to note that in Rolta India Ltd., the Supreme Court was dealing with the issue of chargeability of interest under Section 234B and 234C of the ct on failure to pay advance tax in respect of tax payable under Section 115JA/ 115JB of the Act and therefore, the aforesaid decision has no impact on the issue involved in this appeal. Similarly, in MAXOPP Investment Ltd., supra the Supreme Court has dealt with Section 14A of the Act and has not dealt with Section 115JB of the Act. Therefore, the aforesaid decision also does not apply to the fact situation of the case. In view of preceding analysis, the substantial questions of law framed by a bench of this court are answered in favour of the assessee and against the revenue. In the result, the order passed by the tribunal dated 09.01.2015 insofar as it pertains to the findings recorded against the assessee is hereby quashed. In the result, the appeal is allowed. 21. Respectfully following the decision of the Hon’ble Karnataka High Court, cited (supra) we hold that the disallowance made u/s 14A could not be added to the book profit u/s 115JB of the Act. Accordingly, the order of the CIT(A) on this issue is upheld and the Page 19 of 19 ground raised by the Revenue is dismissed. 23. Accordingly considering the past history on this issue and the legal position not disputed by the Revenue we dismiss the Ground No. 3 also. 24. In the result, appeal of the Revenue is dismissed. Order pronounced in the Open Court on this 07 th Day of December, 2021 in presence of both the parties. Sd/- Sd/- (N.K. BILLAIYA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER R. N. Sr. PS Copy to 1. The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT concerned Bench, Delhi 6. Guard File. // BY Order // Assistant Registrar, ITAT Delhi Benches: Delhi.