| COURT: | ITAT Delhi |
| CORAM: | A. T. Varkey (JM), Pramod Kumar (AM) |
| SECTION(S): | 115JB, 14A, 32 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Depreciation, exempt income |
| COUNSEL: | Ashwani Taneja |
| DATE: | January 9, 2015 (Date of pronouncement) |
| DATE: | January 12, 2015 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| (i) Unabsorbed depreciation of AYs 1997-98 to 2001-02 is eligible for relief granted by amended s. 32(2) in AY 2002-03 (ii) Judgement of a non-jurisdictional High Court has to be preferred over the judgement of a Special Bench of the ITAT (iii) In the absence of exempt income, s. 14A disallowance cannot be added to s. 115JB book profits even if assessee has accepted s. 14A disallowance in the normal computation | |
The assessee may have accepted the disallowance under section 14A but once it is a settled legal position, in the light of the law laid down in CIT Vs Holcim India Pvt Ltd (Del) that there cannot be any disallowance under section 14A unless there is corresponding exempt income and the assessee has no such exempt income, adjustment under clause (f) of Explanation to Section 115JB (2) cannot indeed be made. The adjustment has to meet the tests of law and what cannot be considered to be ‘expenditure relatable to exempt income’ under the law, cannot be subjected to the adjustment either. There is no estoppel against the law. The mere fact that the assessee has accepted this disallowance affects that disallowance only and nothing more than that; it does not clothe such an adjustment, in computation of book profit under section 115JB, with legality
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