TMI Blog2013 (3) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal by the order cited above, being so, we are not in a position to take any contrary view in this matter in view of the order of the Tribunal in the case of Micro Instruments Co. Ltd. vs. ITO [2008 (7) TMI 981 - ITAT CHANDIGARH] wherein it was held that the assessee's claim for deduction u/s. 80IB has been allowed in the initial assessment year and also thereafter, claim for such deduction cannot be denied for subsequent years without any justification. - we are of the opinion that claim u/s. 80IA has to be allowed . As regard addition u/s. 115VT of the Income tax Act, 1961 - Held that:- When we compute the book profit in accordance with the provisions of section 115JB of the Act, the assessee is required to credit the Tonnage Tax Reserve Account as per book profit shown in the audited P & L Account and Balance Sheet. There is no dispute in this case that audited P & L Account shows the book profit at ₹ 7,22,74,369. If there is no dispute regarding this profit shown in the audited P & L Account and Balance Sheet, the Assessing Officer is precluded from tinkering the same. Explanation (1) to subsection (2) of section 115JB also does not provide for increase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar ports. Against this the Revenue is appeal before us. 4. The learned departmental representative submitted that the issue is not at all covered by the order of the Tribunal in favour of the assessee by the order cited supra. He relied on the order of the Assessing Officer. 5. On the other hand the Learned Authorised Representative for the assessee relied on the order of the Tribunal in assessee s own case cited supra and submitted that the Amendment to section 80IA by the Finance Act 2007 or 2009 has no application. According to learned AR, the decision delivered by the Special Bench in the case of B.P. Patil vs. ACIT (1 ITR 703) (Tribunal) has no relevance to the facts of the present case. He submitted that the Special Bench referred its decision in the case of a developer; it applies only to a developer and not to an O M operator as in the case of the assessee. He submitted that the section nowhere specified the entire O M should be carried on by one person, multiple persons can also carry on O M activities. According to the Learned AR, even part of activities of O M is entitled for benefit of deduction u/s. 80IA as per the judgement of in the case of CIT Vs. ABG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oping , to clarify in effect that the agreement between the enterprise and the authority of the central or state govt. or, as the case may be a local authority or a statutory body may provide for i) Developing or ii) Maintaining and operating or iii) Developing, maintaining and operating a new infrastructure facility." 10. With these observations, the Court has clarified that the claim of the assessee even for O M should be entered into with specified authorities, regardless of the proviso to section 80IA. 11. Further, at Para 5, it was observed by the Tribunal in assessee s own case which reads as follows: "5. On the above facts it was explained by the assessee to the assessing officer that the assessee company had entered into agreements for operation and maintenance of infrastructure facilities viz., ports with the developers thereof, who in turn had entered into agreements with specified authorities for the purpose of development, operation and maintenance of these ports. Further, these ports were required to be transferred or handed over to the specified authorities after the expiry of the period stipulated in the agreements with the respective authorities. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant observations of this Tribunal are extracted hereunder: The assessee initially claimed deduction under s. 80IB for the impugned unit in the asst. yr. 2001-02 and the same was allowed. In this assessment year, i.e., 2003-04 the claim of the assessee was in continuation of the claims made in the earlier assessment years for the impugned assessment year falls within the number of assessment years as specified in the section in which the claim is eligible. It is also a pertinent fact position that the claim allowed to the assessee in the initial assessment year of 2001-02 and thereafter in the asst. yr. 2002-03has not been withdrawn. There is no contravention from the Revenue either at the stage of the proceedings before the lower authorities or even before the Tribunal. Thus, factually speaking the claim of the assessee for deduction under s. 80IB stands admitte4d in the initial assessment year and also thereafter up to the assessment year prior to the year under consideration. On the factual matrix, there is no justification for the AO to deny the claim of the assessee for deduction under s. 80IB. The implication of the earlier assessment made for the initial assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee-company at Rs. 5,54,26,805 under normal provisions. Thereafter, the Assessing Officer reopened the assessment and completed the assessment u/s. 143(3) r.w.s. 147 of the Act determining the total income of the assessee at Rs. 5,87,52,009. Further the Assessing Officer applied the provisions of sub-section (5) of section 115VT read with Explanation to sub-section (1) of section 115VT and observed that in the original assessment the net profit of the Tonnage Tax Division was Rs. 7,22,74,369. This was arrived at after reducing the expenses which are not allowable i.e., donations at Rs. 6,97,828 and unrelated prior period expenses of Rs. 46,71,143 totalling to Rs. 53,68,972 and disallowed the same and brought to tax the income of Rs. 53,68,972 as tonnage income. On reopening assessment the Assessing Officer considered the disallowance of Rs. 53,68,972 as this is not related to tonnage income in turn increased the tonnage to Rs. 7,76,43,341 and computed the book profit at Rs. 7,76,43,341 and according to the Assessing Officer Tonnage Tax Reserve Account has to be created at Rs.1,55,28,268 as the assessee company created only Rs. 1,48,65,622 to Tonnage Tax Reserve Account, the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble expenses under the normal provisions of the Act would go to increase the book profit, which is against the express provisions of the Act, precedent case laws and the accepted canons of the concept of tax on book profit. 20. On the other hand, the DR submitted that the Assessing Officer is justified in removing the unrelated expenses i.e., donation at Rs. 6,97,828 and prior period expenses of Rs. 46,71,143 and recomputed the book profit by applying the provisions of section 115VT and thereby worked out the amount to be credited to the Tonnage Tax Reserve Account, which resulted in addition of Rs. 33,15,204 and which is to be confirmed. Accordingly, he relied on the order of the lower authorities. 21. We have heard both the parties and perused the material on record. We have carefully gone through the provisions of section 115VT with reference to transfer of profit to Tonnage Tax Reserve Account. Relevant extraction of section 115(VT)(1) and section 115VT(5) are as follows: Transfer of profits to Tonnage Tax Reserve Account. (1) A tonnage tax company shall, subject to and in accordance with the provisions of this section, be required to credit to a reserve account (he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the P L account by an amount like donation or prior period items which is said to be added by the lower authorities. We do not find these two elements i.e., donation and prior period items in the Explanation 1 to subsection (2) of section 115JB of the Act. Being so, in our opinion, the Assessing Officer cannot add these two items to the book profit for the purpose of determining the transfer of profit to Tonnage Tax Reserve Account. We also place reliance on the judgement of Supreme Court in the case of Apollo Tyres Ltd. vs. CIT (255 ITR 273) wherein it was held that for the purpose of book profit the net profit as per the audited P L account prepared by the assessee and certified by the statutory auditors of the company as having been prepared in accordance with the requirement of Part II and III of Schedule VI of Companies Act cannot be examined by the Assessing Officer. The Assessing Officer does not have the jurisdiction to go beyond the net profit shown in the P L Account except provided in the Explanation to section 115J of the Act. 23. In view of the foregoing discussion, we are inclined to allow the appeal of the assessee. 24. In the result, all the th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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