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2015 (6) TMI 27 - ITAT AHMEDABAD

2015 (6) TMI 27 - ITAT AHMEDABAD - TMI - Addition to the book profit u/s 115JB - Held that:- We are not inclined to concur with the finding of CIT(A) who has confirmed the addition of ₹ 33,91,715/- made to book profit u/s. 115JB of the Act. We find that Tribunal in assesseeís own case for A.Y. 06-07 allowed the appeal by following the decision of CIT vs. Meghmani Organics Ltd. (2014 (7) TMI 673 - GUJARAT HIGH COURT ), wherein it has been held that material aspect of Tribunalís recording th .....

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to delete the addition of ₹ 33,91,715/- as discussed above. - Decided in favour of assesse. - ITA. No.2052/Ahd/2011 - Dated:- 30-3-2015 - Shri Shailendra Kumar Yadav And Shri Anil Chaturvedi JJ. For the Appellant : Shri S. N. Soparkar, A.R. For the Respondent : Shri M. K. Singh, Sr. D.R. ORDER Per Shailendra Kumar Yadav, J.M: This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-VI, Ahmedabad, dated 19.07.2011 for A.Y. 2001-02 on the followin .....

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e book profit u/s 115JB of the Act. Both the lower authorities ignored facts that due to statutory disclosure requirements appellant company has shown separately current year provisions of ₹ 1, 25, 00,000/-(debit) and reversal of provision of income tax of ₹ 35,99,516/-(credit) however debited only net provision ₹ 89,00,484/- in return of income and computation u/s 115JB of the Act. Ld. CIT (A) ought to have deleted addition considering this factual aspect. It be so held now. 5 .....

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f ₹ 33,91,715/-. Assessing Officer stated in assessment order dated 22.11.2010 on this issue as under: 8.1. have carefully considered reply of the assessee and not found acceptable. On the issue of adding back of prior period expenses, the assessee has only furnished details of expenses and allow ability of these expenses has not been explained by the assessee. Perusal of the details furnished by the assessee reveals that expenses claimed are on account of salary, interest, stationery, ins .....

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ion of prior period expenditure of ₹ 27.36 lacs is disallowed and added to the income of the assessee. 10. On the issue of loss by fire, the assessee has claimed ₹ 85.02 lacs but how this figure is arrived was explain by the assessee as under:- The assessee lost ₹ 1,44,42,752 + 40,40,932 = ₹ 1,84.83,684/- due to fire as per certificate issued by Foods and Drugs control administrator dated 22/02/2001. Out of this the assessee received 1,05,36,758/- from insurance company a .....

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ds prior period expenses are required to be added back while arriving at the amount of book profit as per the decision of ITAT madras in case of Shree Rajendra Mills Ltd. vs. DCIT. (63 TTJ 697) & ITAT Delhi in case of Innovative Tech Park Ltd vis. ACIT (79 ITO 445) where it was held that prior year expenses should not be deducted in computing book profit u/s1158J. Accordingly, as discussed above the figure of claim in the computation of income of ₹ 33,00,641/- as prior period expenditu .....

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, the deduction claimed of ₹ 33,00,641 in the computation of income out of book profit, ere will be addition of ₹ 91,074/- in the book profit. Penalty U/s.271(1)(c) is initiated for furnishing inaccurate particulars of income. (Disallowance of ₹ 33,91.7151 -) 13. On the issue of adding back of provision of Income Tax of ₹ 33.99 lacs, the assessee has claimed that this being reversal of excess provision for Income tax pertaining to past period. 14. After considering reply .....

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assesee company." 3.1 Matter was carried before the First Appellate Authority, wherein CIT(A) held as under: 3.3 I have considered the facts of the case; assessment order and appellant's submission. In this case the revision order under section 263 was passed by CIT setting aside the assessment to the assessing officer to consider prior period items and difference in tax provisions debited. Appellant did not appeal against the order of CIT under section 263 and therefore revision order .....

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ot be adjusted and accordingly assessing officer is justified in not allowing prior period items from book profit for the purpose of section 115 JB. This adjustment is accordingly confirmed. As regards provisions for tax, the same has to be clearly added to the book profit. It is not in dispute that appellant debited RS 1.25 crores as income tax provision however in the computation of book profit only 89 Lacs were added. Therefore there was a shortfall of RS 35.99 Lacs. The amount was therefore .....

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profit u/s. 115JB of the Income Tax Act. CIT(A) should have deleted the addition in view of according to various judicial pronouncements on the issue. Learned Authorized Representative also pointed out that this issue is covered in favour of assessee by order of ITAT B Bench, Ahmedabad, in case of assessee s own case for A.Y. 2006-07 in ITA Nos. 1146 & 1518/Ahd/2011, wherein similar issue has been decided by Tribunal in favour of assessee by observing as under: 21. We have heard the rival su .....

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or the computation of taxable income u/s.115JA of the Act, 1961?" 21.1. The Hon'ble Gujarat High Court answered the question in favour of assessee by observing as under:- "10. In that view of the matter, as rightly pointed out by the counsel for the assessee, in view of the decisions of the Apex Court in the case of Apollo Tyres Ltd. vs. Commissioner of Income-Tax reported in ITA No. 2052/Ahd/11 A.Y. 01-02 [Cadi la Pharmaceuticals Ltd. vs. DCIT (OSD) ] Page 7 (2002) 255 ITR 273 and .....

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