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2018 (6) TMI 1751 - AT - Income TaxDetermining the tax liability in terms of Sec. 115JB - MAT computation - disallowance of reduction on account of the provision made for premium on redemption of preference shares while computing the book profits u/s 115JB - As per the CIT(A), the redeemable Preference shares in question were not in the nature of ‘debt’ and, therefore, any liability thereof could not be considered to be an ‘ascertained liability’ - HELD THAT:- There is a complete explanation which reflects the nature and character of the Provision and it clearly underlines the obligation or the liability to pay over and above the face value of the Preference shares at the time of redemption. Therefore, in our view, no fault can be found with the conclusion that the impugned Provision was indeed an ‘ascertained liability’ of the nature referred to in clause (c) of Explanation-1 to Sec. 115JB of the Act. We may also add here that there is nothing to distract from applying the ratio of the judgment of the Hon'ble Bombay High Court in the case of Raymond Ltd. [2012 (4) TMI 127 - BOMBAY HIGH COURT]to conclude that the impugned amount is to be understood as a known liability and not as a Reserve In our considered opinion, it is a well-settled proposition of law that in order to address a legal point, what is of relevance is the applicable legal position as emerging from the statutory provisions and the attendant jurisprudence and not merely the stand taken by the parties at a particular point of time. Thus, we are not going into the efficacy of the contradiction that is sought to be pointed out by the ld. CIT-DR as, in our view, the same is not germane to decide the controversy before us. Another aspect which has been emphasised by the ld. CIT-DR is that the adjustment sought to be made by the assessee is not in terms of the prescription in Explanation-1 to Sec. 115JB of the Act. We have already examined the said plea and in the context of our aforesaid discussion, find that the claim of assessee of the impugned Provision being in the nature of an ascertained liability is justified on facts as well as on point of law. In any case, this aspect of the matter has also been examined in detail by our coordinate Bench in the earlier year with which we concur. Thus, we conclude by holding that the impugned Provision is in the nature of an ascertained liability and in terms of clause (c) of Explanation-1 to Sec. 115JB of the Act, ‘book profit’ for the purpose of Sec. 115JB of the Act has to be determined net-off of such Provision. Especially where it has been rendered in assessee’s own case and under identical set of facts. At this stage, we may hasten to add that we are in complete concurrence with the observations of our co-ordinate Bench in the case of Shri Homi K. Bhabha [2011 (9) TMI 104 - ITAT MUMBAI] that to follow an earlier precedent of the co-ordinate Bench or to make a reference to a larger Bench is dependent on the satisfaction of the Bench about the correctness or otherwise of the precedent and not the view of the aggrieved party. As we have indicated earlier, even after examining the pleas set-up by the ld. CIT-DR, we find ourselves unable to disagree with the precedent rendered in assessee’s own case. We find no justifiable reasons for recommending constitution of a Special Bench. Needless to say at this juncture, the aggrieved party is not left without remedy inasmuch as the statute provides for appeal to the Hon'ble High Court against the order. Therefore, the said view of the Department is also negated. Assessment u/s 153A - CIT(A) deleting the additions made in the assessment order passed u/s.153A r.w.s. 143(3) of the Act on issues not based on any incriminating material found during the course of search - HELD THAT:- Pertinently, on the date of search, i.e. 23.05.2013, the assessment for Assessment Year 2008-09 was not pending and, therefore, in view of the second proviso to Sec. 153A(1) of the Act, such assessment did not abate. Clearly, in such a situation, the additions that are permissible in an assessment u/s 153A of the Act are only those which are based on incriminating material found in the course of search relating to such additions. Assessing Officer is denuded from making additions on matters which have attained finality in the original assessment without there being any incriminating material found in the course of search. The aforesaid proposition is fully supported by the judgment of the Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva Ltd) [2015 (5) TMI 656 - BOMBAY HIGH COURT] The fact-situation brought out by the CIT(A) is clearly borne out of record inasmuch as a perusal of the assessment order itself reveals that qua the aforesaid additions, there is no reference to any incriminating material found in the course of search. Therefore, we find no reasons to interfere with the factual findings arrived at by the CIT(A) and, in that background, no fault can be found with the CIT(A) for having applied the ratio of the judgment of the Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva Ltd) (supra) in order to delete the aforesaid additions. Thus, on facts as well as on point of law, we find no reasons to interfere with the decision of the CIT(A), which we hereby affirm.
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