TMI Blog2014 (7) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... against Revenue. Reduction in Prior paid expenses – Computation of taxable income u/s 115JA of the Act – Held that:- The Tribunal rightly of the view that prior period expenses were reduced for arriving at the book profit which was accepted by the Auditors of the Company and by the company itself in the AGM, then no adjustments other than the adjustment specified in Explanation to section 115JA(2) - The decision in Apollo Tyres Ltd. vs. Commissioner of Income-Tax [2002 (5) TMI 5 - SUPREME Court] followed - Decided against Revenue. - Tax Appeal No. 109 of 2010, Tax Appeal No. 112 of 2010 - - - Dated:- 13-12-2011 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mr. Manish R Bhatt Sr. Advocate with Mrs. Mauna M. Bhatt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee by a sum of ₹ 4.63 crores which the assessee had debited in the P L Account. The issue was carried in appeal by the assessee. CIT(Appeals) reduced such figure to a sum of ₹ 13.59 lakhs accepting the contentions of the assessee that proportionate expenses for such trading activity alone would have to be taken into account. 3. Revenue carried the issue in appeal. The Tribunal upheld the view of CIT(Appeals). This issue is, therefore, carried before us in the present Tax Appeal. 4. Having heard learned counsel for the parties as pointed out by the counsel for the assessee, we find that clause (b) of sub-Section(3) of Section 80HHC provides that where the export out of India is of trading goods, the profits derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 71 lakhs being prior period expenses having been debited in the books of accounts duly audited, and there being no adjustments specified in respect of such amount in Explanation to Section 115JA(2) of the Act, the Assessing Officer was not justified in adding the same to determine the book profit of the company. The Tribunal, thereafter, recorded as under:- We find that it is not in dispute that the assessee has reduced ₹ 71,16,879/- in its audited Profit Loss account which was adopted by the company in its AGM. As the aforesaid prior period expenses were reduced for arriving at the book profit which was accepted by the Auditors of the Company and by the company itself in the AGM, then no adjustments other than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, could contend that the observations of the Tribunal that the amount of ₹ 71 lakhs was reduced in the audited Profit and Loss Account of the company, which was debited by the company in its AGM and which was also accepted by the auditors of the company are at variance with the observations of the Assessing Officer to the effect that profit of the company after tax in the Profit and Loss account was shown at ₹ 10.27 crores and from such figure the assessee had, by appropriating sum of ₹ 71 lakhs, brought down the profit to ₹ 9.56 crores. 12. We have, however, proceeded on the basis of the facts recorded by the Tribunal. Material aspect of the Tribunal's recording the fact is that the amount of ₹ 71 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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