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2015 (10) TMI 2052 - AT - Income TaxValidity of reopening of assessment - Held that:- CIT(A) has given a clear finding that the assessing officer has reopened the assessment only on the basis of material facts available with him and not on account of change of opinion. Further, the observation of the AO that the assessee did not produce the relevant materials necessary for completion of assessment at the time of completion of original assessment has also been upheld by the Ld CIT(A). At the time of hearing before us, the assessee could not contradict these observations made by the Ld CIT(A). Hence, we do not find any infirmity in his decision in confirming the validity of re-opening of assessment. Addition of "Provision for Wealth tax" for computing Book Profit u/s 115JB - Held that:- It is a well settled proposition that the provisions of sec. 115JB is a complete code by itself and the additions prescribed therein only can be added to the net profit for computing the "book profit" under that section. As per clause (a) of Explanation 1 to sec. 115JB, what is required to be added to the Net profit is “the amount of income tax paid or payable, and the provision there for.” This clause provide for addition of only “income tax” and not “wealth tax”. The question as to whether the wealth tax was actually paid or a mere provision was made, in our view, is irrelevant for interpreting the above said provision. The very same issue came for consideration before the Hon‟ble Bombay High Court in the case of Echaj Forging Pvt Ltd (2001 (2) TMI 56 - BOMBAY High Court) and the revenue conceded before the Hon‟ble High Court that the wealth tax could not be added to the Net profit u/s 115J of the Act. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition of provision for wealth tax while computing book profit u/s 115JB of the Act. - Decided in favour of assessee. Addition of gain arising on re-purchase and extinguishment of debenture bonds - Applicability of section 41(1) - CIT(A) deleted the addition - Held that:- We are of the view that the Ld CIT(A) was right in law in holding that the provisions of section 41(1) cannot be applied as the amount of surplus is not on account of trading liability and accordingly he was justified in deleting the addition made by the assessing officer. Further, as per the ratio laid down in the case of ICDS (2006 (3) TMI 90 - KARNATAKA High Court) the gain realized by the assessee on re-purchase and extinguishment of debentures cannot be considered as income u/s 2(24) of the Act.- Decided in favour of assessee. Addition of Commission/surcharge paid to SUMO, Iraq Government agency on the basis of Volker Committee report - CIT(A) deleted the addition - Held that:- Consistent with the view taken by the co-ordinate bench of Tribunal in the assessee‟s own case for AY 2001-02, we uphold the order of Ld CIT(A) in deleting the disallowance of commission/surcharges paid to SUMO and also the transportation charges made by the AO on the basis of Volkar committee report.The facts prevailing in the instant case show that the assessee has not made any payment directly to Iraqi Government. It has paid purchase price to its supplier M/s Alcon Petroleum Ltd. The Ld CIT(A) has given a categorical finding that there is no evidence or material to support the alleged payment of illicit commission/surcharge over and above the purchase price by the assessee to the Iraq Government. Further, as per the contract signed between the assessee and M/s Alcon Petroleum Ltd, M/s Alcon has also not paid any surcharge to Iraqi Government or their agency for procuring the crude oil. Hence, we are of the view that the Ld CIT(A) was justified in deleting this addition by holding that there is no material to support this addition- Decided in favour of assessee.
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