TMI Blog2007 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... short) relating to the assessment year 2003-04. 3. Return of income for the assessment year in question was filed by the petitioner ("the assessee" for short) on April 11, 2003 declaring loss of Rs.73,11,996/-. In the profit and loss account, the assessee had made provision of Rs.2,16,01,248/- for deferred taxation. During the course of the assessment proceedings, the assessing officer called upon the assessee to show cause as to why the provision for deferred taxation amounting to Rs.2,16,01,248/- made in the profit and loss account should not be taken into account for determining the book profit under section 115 JB of the Act. 4. The assessee in its reply submitted that the provision for deferred taxation was made in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company was determined at Rs.73,01,760/-consequent to appeal effect. 2. Subsequently it was gathered that Assessee Company had considered Rs.3,30,74,365 as Net Profit before tax. However book profit under the provisions of section 115JB had been shown at Rs.10,720,671 which was accepted while computing book profits under section115JB. Profit as per profit and loss account was shown at Rs.3,30,74,365 and after allowing brought forward loss / unabsorbed depreciation (which ever is less) of Rs.19,18,244 book profit worked out to Rs.3,11,56,121 as against Rs.95,54,873 disclosed by the assessee, thus resulting in underassessment of book profit by Rs.2,16,01,248 which is on account of provision for deferred tax. As provisions for deferred tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is filed. 7. Mr. Pardiwala, learned counsel appearing on behalf of the petitioner submitted that the notice issued under section 148 of the Act for reopening of the assessment as well as the order rejecting the objections are bad in law because concluded assessments can be reopened only if the assessing officer has valid reason to reopen the assessment and not mere change of opinion. In the present case, during the assessment proceedings the very same issue was raised by the assessing officer and the assessment order under section 143(3) of the Act was passed after accepting the explanation given by the petitioner and, therefore, on a mere change of opinion, it is not open to the assessing officer to reopen the concluded assessment. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. We have carefully considered the rival contentions. 10. In the present case, the question as to whether for determining 'total income' under section 115 JB of the Act, the book profit has to be increased by the amount of provision for deferred taxation made by the assessee in its profit and loss account was specifically raised by the assessing officer at the time of the assessment under section 143(3) of the Act. The assessee explained that the provision for deferred taxation is made in the profit and loss account as per the accounting standards and, therefore, the book profit arrived at in the profit and loss account cannot be increased by the amount of provision for deferred taxation. Once the explanation given by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the very same issue and held that the book profit determined by the assessee cannot be increased by the amount of provision for deferred taxation while determining "total income" under section 115 JB of the Act. In the absence of any decision to the contrary, the assessing officer was bound by the said decision. Therefore, the assessing officer could not ignore the decision of the Kolkata Bench in the case of Balrampur Chini Mills Ltd. [2008] 297 ITR (AT) 15 and continue with reassessment proceedings. 12. No doubt, Explanation 2(c) to section 147 of the Act empowers the assessing officer to reopen an assessment if he has reason to believe that excessive relief has been granted to the assessee under the Act. The belief that ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
