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2020 (3) TMI 114 - AT - Income TaxRevision u/s 263 - MAT - assessment of the prior period income’s assessment for the purpose of sec.115JB computation - declaration of additional income followed payment of tax as per settlement Commission orders u/s 245D(4) and 245D(6B) order(s) - HELD THAT:- Case file suggests that the clinching factual position herein is that the assessee had declared additional income of ₹12,56,69,73/- in its disclosure petition(s) before the Settlement Commission on 18.03.2014 for assessment year(s) 2010-11 to 2013-14. It is an admitted fact that the said additional income had not been included in the corresponding computation(s) finalized earlier. The said declaration of additional income followed payment of tax as per sec. 245D(4) and 245D(6B) order(s) in pages 49 to 70 and 71 to 86; respectively. There is further no dispute that the corresponding additional income of ₹12,56,69,703/- had also been incorporated in the books of account of the relevant previous year 2013-14 as well as in the profit and loss account as an “exceptional income” alongwith the corresponding expenditure of ₹153,50,000/- which had not been claimed in the settlement petition. Once the assessee had declared additional income of ₹12.56 crores in earlier assessment year(s) 2010-11 to 2013-14 in due compliance of the Settlement Commission and got the same assessed under normal scheme than MAT assessment, there is hardly any scope left of under-assessment on impugned prior period income going by the PCIT’s observations. We wish to re-emphasise here that PCIT has raised the issue of prior period income of ₹11,04,19,703/- for sec. 115JB computation only relating to the relevant previous year. We thus are of the opinion that once the said prior period income stood assessed under normal provisions in the corresponding earlier assessment year(s) 2010-11 to 2013-14, The Assessing Officer’s alleged inaction in not disallowing the very sum(s) as prior period income for the purposes of MAT computation could neither be termed as erroneous nor causing prejudiced to interest of the Revenue going by the foregoing settled legal proposition (supra). The assessee had admittedly incorporated its additional income of ₹12,56,69,703/- in its books of account of the relevant previous year in the nature of its capital. The same therefore acquired the character of a capital receipt routed in profit and loss account as per part- I and part-II of the schedule-VI of the Company’s Act. That being the case, we hold that there was no loss or prejudice caused to the Revenue even otherwise also since a capital receipt not taxable under the normal provision could also not be added u/s 115JB MAT computation as per this tribunal’s co-ordinate Bench’s decision Tata Metaliks Ltd. vs. Income Tax Officer, Ward-3(2), Kolkata [2018 (4) TMI 1757 - ITAT KOLKATA] Assessee ought not to have any grievance at this premature stage since the PCIT has merely directed the Assessing Officer to recompute its book profits as per the foregoing detailed observations - assessee had very well placed all of its additional income declaration details before the Settlement Commission followed by the corresponding order(s) finality culminating assessment thereof in assessment years) 2010-11 to 2013-14 in normal scheme. We thus conclude that even if the PCIT’s directions are taken as for the purpose of mere re-computation, the same go against the settled legal proposition that the sec. 263 revision jurisdiction is not attracted in absence of the corresponding assessment being both erroneous as well as causing prejudice to interest of the Revenue. In Narayan Tatu Rane vs. Income Tax Officer [2016 (5) TMI 1162 - ITAT MUMBAI] also holds that insertion of Explanation-2 in sec. 263 vide the Finance Act, 2015 w.e.f 01.06.2015 does not ifso facto mean that every regular assessment could be revised even in those cases wherein the action of the Assessing Officer satisfies normal “prudence” test in scrutiny. We accordingly hold that the PCIT’s revision directions qua this former issue of prior period income’s sec. 115JB MAT computation is not substantive. The same is accordingly reversed. Deduction of excise duty on payment basis - paid for the period from December, 2009 to July 2011 as per the settlement of the case - deduction u/s 43B - Held that:- In clinching factual aspects as well that the Assessing Officer’s action in not disallowing / adding the impugned excise duty claim could neither be termed as erroneous nor prejudicial to the interest of the Revenue so as to set sec. 263 revision mechanism in motion as per PCIT’s directions. We accordingly accept the assessee’s foregoing arguments challenging correctness of the impugned revision action. The same stands reversed. - Decided in favour of assessee.
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