Held that disallowance made under section 14A read with rule 8D cannot be made while determining expenses as mentioned under clause (f) to Explanation 1 to section 115JB. However, since there is no mechanism given under clause (f) to Explanation 1 of section 115JB to workout expenses with respect to exempted income, disallowance was to be limited on an ad hoc basis at rate of 1 per cent of exempted income. (AY. 2006-07)
DCIT (OSD) v. Vishal Export Overseas Ltd. (2022) 197 ITD 459 (Ahd.)(Trib.)
S. 115JB : Book profit-Disallowances made under section 14A read with rule 8D could not be applied to provision of section 115JB-Exempted income-Disallowance is restricted on an ad-hoc basis at rate of 1 percent of exempt income. [S. 14A, R.8D]