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2005 (7) TMI 39 - HC - Income TaxBook profits - Whether Tribunal was justified in holding that the order passed by CIT u/s 263 was correct and thereby upholding the same? Whether Tribunal was justified in holding that the order passed by AO was erroneous and prejudicial to the interests of the Revenue?" - The view about the scope and enquiry into the book profits as per the audited profit and loss account duly approved by the AGM and certified by the Registrar of Companies is settled by the decision SC in Apollo Tyres's case. Hence the orders of CIT u/s 263 as well as of the Tribunal are contrary to it, and must be held to be erroneous and not sustainable. In view of our aforesaid discussion, questions are answered against the Revenue and in favour of the assessee by holding that the Tribunal was in error in holding that the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue and, therefore, the CIT could pass the order u/s 263 by recomputing the book profit by adding the amount of depreciation claimed by the assessee in this profit and loss account which has been audited, approved by the AGM and certified by the Registrar of Companies. Hence the exercise of jurisdiction by the Commissioner of Income-tax under section 263 was not sustainable nor its affirmance by the Tribunal
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