Of Cit v. Corrtech Energy Pvt. Ltd. [45

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 305 of 2020 ========================================================= = THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 VersusADANI WILMAR LTD. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1MR B S SOPARKAR(6851) for the Opponent(s) No. 1========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA Date : 25/01/2021 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 is at the instance of the Revenue and is directed against the order dated 20.02.2020 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench “B”, in the ITA No.2044/Ahd/2018 for the A.Y. 2015-16. 2. The Revenue has proposed the following substantial questions of law for consideration of this Court : “[A]Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.13,55,80,000/- made on account of disallowance u/s. 14A of the Act r.w. Rule 8D? [B]Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.13,55,80,000/- made on account of disallowance u/s. 14A r.w Rule 8D of the Act while computing Book Profit u/s. 115JB of the Act ?” 3. We have heard Mr. Manish Bhatt, the learned Sr. Counsel appearing for the Revenue and Mr. B.S.Soparkar, the learned counsel appearing for the respondent – Assessee on caveat. 4. Both the questions as proposed by the Revenue are no longer res integra. The first question is covered by a decision of this Court in the case are no longer res integra. The first question is covered by a decision of this Court in the case of CIT Vs. Corrtech Energy Pvt. Ltd. [45 Taxxmann.com 116]. The view taken therein is that, when the assessee has not made claim for exemption in the income from payment of tax in disallowance could be made under Section 14A of the Act. The second question would also not survive once the view is taken that there could not have been any disallowance under Section 14A read with Rule 8D of the Act. In such circumstances, there is no question of computing the Book Profit under Section 115JB of the Act. In other words, the expenses incurred to exempt the income cannot be added for computing the Book Profit under Section 115JB of the Act. 5. In view of the aforesaid, this appeal fails and is hereby dismissed. We may clarify that since the disallowance under Section 14A itself has been deleted, therefore, there is no question of adding back under Section 11JB of the Act. been deleted, therefore, there is no question of adding back under Section 11JB of the Act. (J. B. PARDIWALA, J) SUCHIT (ILESH J. VORA,J)