TMI Blog2017 (1) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable. Therefore, as there were two views were available, the Ld. CIT should not be allowed to invoke the powers u/s.263. If the answer of the above refereed question held as yes, then the Ld. CIT will invoke power in each and every cases and will create a huge mess. Therefore, the power of CIT is restricted to the decision of the jurisdiction high court or Supreme Court which were overlooked by the assessing authority. - Decided in favour of assessee - ITA No.2964/Mum/2016 - - - Dated:- 22-1-2017 - SHRI R.C.SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For The Assessee : Shri Vimal Punmiya For The Revenue : Shri C.S. Gulati ORDER PER R.C. SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT-13, Mumbai dated 30/03/2016 for A.Y.2011-12 in the matter of order passed u/s.263 of the IT Act. 2. The following grounds have been taken by the assessee:- 1. The Ld. CIT erred in passing the order under section 263 of the Act, inspite of the fact that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. 2. The Ld. CIT erred in ignoring all the relevant facts and legal precedents cited by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee had incorrectly reduced deduction under section 80IB which was accepted during the scrutiny assessment for the year, under normal provisions. Thereafter, vide order dated 30.03.2016 the Ld. CIT set aside the order of the Ld. AO and directed him to pass a fresh order after considering the ratio mentioned in her order. 9. So far as reduction of profit eligible for deduction u/s.80IB is concerned while computing book profit u/s.115JB, there are the two views possible. As per settled judicial pronouncements by Hon ble Supreme Court in case of Max India Ltd., 295 ITR 282 where two view are possible and the AO has taken one of the plausible view, the order passed by AO cannot be said to be erroneous and prejudicial to interest of revenue. 10. Therefore the moot question arises in the case of the assessee is as under: Whether the Ld. CIT can invoke the powers under section 263 of the Act, by placing reliance in the decision of non-jurisdictional high court and specifically in absence of decision of jurisdictional court ? 11. In this regard, we observe that explanation 2(d) under section 263 specifically states that revision is possible only due to judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5JA. Exemption/ deduction allowed by one provision of the Act cannot be taken away by another provision of the Act. Sec. 115JA, the predecessor to Sec. 115JB, was introduced to the statute book and the budget speech of the finance minister while introducing the Bill in the House and also to the subsequent board circular, for levying a minimum alternate tax to those companies which were though paying handsome dividends to its shareholders and had good amount of book profit, was, nevertheless, filing a return of nil income for the purpose of income tax. 16. When once the assessee company had developed housing project, where the income is exempted u/s 80IB(10), the assessee company had legitimate expectation to enjoy the benefit of exemption and even a legitimate expectation being in the nature of an assurance in law if it flows out of the statutory provisions, that cannot be denied to the assessee company. Reliance is placed on the following judicial pronouncements. I) MRF LTD VS. Asst. CST (2006) 148 STC 225 (SC) II) Bannari Amman Sugars Ltd., vs. CIT (2005) 1 SCC 625 III) M P Oil Extraction vs. State of MP (1997) 7 SCC 592 17. The receipts which are not taxable canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not in nature of income, can be taxed as income under section 115JA - Held, no - Whether exempt income under section 50 would remain exempted as per provisions of sub-section (4) of section 115JA -Held, yes - Whether, therefore, capital gain arising to an assessee under section 50 on a depreciable asset is liable to be excluded from calculation of deemed profits under section 115JA - Held, yes. 22. In ITO V. SURAJ JEWELLERY (INDIA) LTD. 21 SOT 79 (MUM), Mumbai Tribunal again held that capital receipts which do not constitute income under the Act cannot be brought to tax net by employing the mechanism of section 115JB. The Tribunal further held that section 115JB has not intended to bring all non-income items within the domain of the Act. 23. By inserting sub-sec. (4) in sec. 115JA and sub-sec. (5) in sec. 115JB, the legislature has made both these sections as part of the Act now. Further, In SUTLEJ COTTON MILLS LTD. V. ACIT 45 ITD 22 (CAL) (SB) Special Bench held that the expression book profit u/s. 115J is intended to be confined to business profit and that the term book profit is not intended to include profit in realization of any asset. It is further held that w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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