TMI Blog2010 (12) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 3-12-2010 - G.C. Gupta, Akber Basha, JJ. A.V. Raghuram for the Assessee V. Srinivas for the Revenue ORDER Akber Basha, Accountant Member:- 1. This appeal of the assessee is directed against the order of the CIT under s. 263 of the Act dt. 11th March, 2010 and it pertains to the asst. yr. 2002-03. 2. Grounds raised by the assessee in this appeal read as under:- "1. On the facts and in the circumstances of the case, the order of the CIT, Hyderabad is illegal and unsustainable in law. 2. The learned CIT failed to appreciate that there is no order under s. 115JB which could be revised and thereby erred in invoking provisions of s. 263 to review a non-existing order. 3. With out prejudice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of s. 115JB does not arise. The CIT ought to have refrained from interfering from the order of the AO. 8. For these and other grounds that may be urged at the time of hearing, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal." 3. Brief facts of the case are that the assessee filed its return on 31st Oct., 2002 showing net loss of Rs. 61,21,720 under the normal provisions of the IT Act and nil income under s. 115JB of the Act. The return was processed accordingly. Subsequently, on 6th April, 2006, a notice under s. 148 was issued and the assessment was completed on 11th Dec., 2007 reducing the net loss from Rs. 61,21,720 to Rs. 17,18,952. The CIT noticed that, while finalizing the order, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent code. They are very much part and parcel of the income-tax provisions. The applicability of MAT comes only when the liability under MAT is more than the liability under the normal provisions of the Act. In this case, since the AO had computed nil tax liability under the normal provisions of the Act, he was bound to compute the tax liability under the MAT. Non-computation of the same simply means that the AO accepted the assessee's computation as pointed out by the assessee itself. But the issue is whether the computation was correct or not. In the case of CIT vs. Sterling Chemicals Limited 262 ITR 278 (SC) (sic), it has been held that the interest income cannot be assessed as business income and the same has to be brought to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s. 263 of the Act before the CIT. The first claim is with regard to the deduction of R and D expenditure incurred by the assessee during the year amounting to Rs. 4,30,99,233. The CIT held that the fresh claim made by the assessee is not an issue open at the stage of proceedings under s. 263 of the Act. The second issue is with regard to the deduction of brought forward loss or depreciation loss, whichever is less, as per the provisions of s. 115JB of the Act. The CIT directed the AO to allow the deduction claimed by the assessee as per the law. Thus, the CIT after considering the facts elaborately in his order set aside the assessment for the assessment year under consideration and directed the AO to make the assessment afresh by computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that such adjustment is not possible. The CIT failed to appreciate that since the "book profit" under the Companies Act, 1956 was not correctly determined by the assessee, it would be the duty of the CIT to first arrive at correct "book profits" as per company law and then apply the provisions of s. 115JB of the Act and the "book profit" is resulting in "loss" the question of applying the provisions of s. 115JB does not arise. The CIT ought to have refrained from interfering from the order of the AO. Further, in support of his contentions, he relied on the decision of the jurisdictional Special Bench of the Tribunal in the case of Rain Commodities Ltd. vs. Dy. CIT (ITA No. 673/Hyd/2009) (2010) 41 DTR (Hyd)(SB)(Trib) 449. 6. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without application of his mind. Even otherwise, the order under s. 115JB of the Act sails together with the order passed by the AO under the normal provisions of the Act. Though the assessee has argued that the provisions of s. 115JB of the Act are a separate code in itself, it is not an independent code but the same are, in our considered view, part and parcel of the income-tax provisions. The applicability of MAT comes only when the tax liability under MAT is more than the tax liability under the normal provisions of the Act. In this case, since the AO had computed nil tax liability under the normal provisions of the Act, he was bound to compute the tax liability under the MAT. Non-computation of the same implies that the AO had accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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