TMI Blog2017 (6) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 154 of the Act. The AO cannot be allowed to pass impugned order under section 154 on debatable issue. No justification for the AO to pass rectification order under section 154 of the Act to disturb the calculation under section 115JB of the Act, already considered. Appeal of the assessee is allowed. - ITA No. 112/Chd/2017 - - - Dated:- 2-6-2017 - Shri Bhavnesh Saini, Judicial Member Appel lant By : Shri Parikshit Aggarwal Respondent By : Shri S . K . Mittal ORDER This appeal by the assessee has been directed against the order of Ld. CIT(A)-2, Gurgaon dt. 25/11/2016 for assessment year 2006-07 on the following grounds of appeal : 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 204/2013-14 dated 25.11.2016 has erred in passing that order in contravention of the provisions of Section 250(6) of the Income Tax Act, 1961. 2. That on law, facts and circumstances of the case, the Worthy CIT (A) was not justified in confirming the action of Ld. AO wherein he held that while computing the Book profit as per Explanation to Section 115JB, the reduction of brought forward loss or depreciation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ichever is less. However on perusal of the present notice, it appears that here lies some dispute. Your goodself is of the opinion that actually business loss is ₹ 9,25,932/- and unabsorbed depreciation is ₹ 59,51,104/-. Hence the lower of these two i.e. ₹ 9,25,932/- should have been allowed deduction from book profit instead of ₹ 58,28,299/- claimed by the assessee. It is submitted that the figure of business losss is ₹ 9,25,932/- and unabsorbed depreciation is ₹ 59,51,104/-, pointed out by your goodself to be reduced, is actually figure of loss/depreciation as per provisions of Income Tax Act whereas the figures to be reduced from Profit as per P L account are as per books of accounts. The relevant extract of provision is reproduced as under: (iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account. Explanation, For the purpose of this clause. (a) the loss shall not include depreciation; (b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation is nil; or From the above extract, it is clear that the amount to be reduced f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,34,984/- Total Demand 5,14,727/- Assessed: Issued revised documents. 3. The assessee preferred in appeal before the Ld. CIT(A) against the order under section 154 of the Act, however appeal of the assessee has been dismissed. 4. Ld. Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the issue of computation under section 115JB is highly debatable and as such no order under section 154 should have been passed by the AO. Ld. Counsel relied upon the order of ITAT, Agra Bench in the case of ACIT Vs. Cardinal Drugs Pvt. Ltd. [2013] 37 CCH 22 and order of ITAT, Delhi Bench in the case of ACIT Vs. Uflex Ltd. [2013] 55 SOT 43. 5. On the other hand Ld. CIT(A)relied upon the order of authorities below. 6. I have considered rival submissions and perused the material available on record. Hon ble Calcutta High Court in case of Hindustan Lever Ltd. Vs. JCIT and Others [2006] 284 ITR 42 held that mistake must be obvious that it can be easily corrected, to wit an arithmetical mistake, quotation of wrong section etc. and not on debatable iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Id. CIT(A) by dismissing the departmental appeal. The Auditor of the assessee in Annexure-A also reduced the loss of sick industrial company from the profit. Therefore, assessee has disclosed all the particulars regarding income to be computed under Section 115JB while filing return of income. The certificate regarding assessee is sick industrial company issued by BIFR was also filed at the assessment stage. Therefore, when the A.O. applied his mind to all the facts and circumstances of the case and passed the assessment order by making certain additions which have been deleted by the CIT(A) and while giving appeal effect, ultimately the income/loss declared by the assessee has been accepted. There was no scope for the A.O. to have resorted to the provision of Section 154 of the Act for the purpose of enhancing the income of the assessee. The Id. CIT (A) gave specific finding of fact that the assessee is sick industrial company during the year under consideration. Therefore, the A.O. on long drawn process of reasoning should not have passed the order under Section 154 of the Act. The issue raised by the A.O. in proceeding under Section 154 of the Act is highly debatab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he original assessment order after scrutiny under section 143(3) after examining the books of account produced before him. AO did not dispute the computation under section 115JB of the Act at original assessment stage. The assessee explained before the AO that there is dispute with regard to the explanation sought from the assessee in the rectification notice and actual calculation made by the assessee as per law. Therefore, the AO, on long drawn process of reasoning should not have passed the order under section154 of the Act. The issue raised by the AO in proceeding under section 154 of the Act is highly debatable and requires the issue to be reconsidered by the AO about applicability of provision of section 115JB of the Act which was not raised by the AO in the original assessment proceeding. Therefore AO has no power to review his entire assessment order and to make certain additions in the order under section 154 of the Act. The assessee has declared all particulars regarding computation and assessment to be framed under section 115JB of the Act. When the AO has consciously taken the view to frame regular assessment and made certain additions, AO is not empower to take cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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