TMI Blog2018 (4) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous order, prejudicial to the interests of the Revenue. In that situation provision of section 263 cannot be invoke. Explanation 2(d) under section 263 specifically states that revision is possible only due to judgments of the jurisdictional High Court or supreme court. Further, the assessee has placed the reliance on the various decision where the ratio was laid down were in favour of the assessee. The considerable favourable view was available. 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. The power of CIT is restricted to the decision of the jurisdiction high court or Supreme Court which were overlooked by the assessing authority. No merit in the action of CIT u/s.263. - Decided in favour of assessee. - ITA No.2964/Mum/2016 - - - Dated:- 22-1-2018 - 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing before us as well as cited by CIT in his order passed u/s.263 of IT Act. 8. From the record, we found that while computing book profit u/s.115JB, the AO has reduced the amount of profit exempt u/s.80IB (10) in respect of housing project from the book profit. However, after placing reliance on judgement of Hon'ble Karnataka High Court and on decision of Hon'ble Ahmedabad Tribunal, the Ld. CIT has noted that while computing book profit for MAT u/s. 115JB of the Act, 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 erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 376 (Mum). The issue related to capital gains arising on a depreciable asset which is exempt u/s 50 of the Act. Taking notice of sub-sec (4) of sec 115JA which provisions, as stated above, was not available in sec 115J, the tribunal held that the exempt income under sec 50 would remain exempted as per provisions of sub-sec (4) of sec 115JA and therefore, capital gain arising to an assessee u/s 50 on a depreciable asset is liable to be excluded from calculation of deemed profits u/s 115JA. 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the AO has taken one view, with which the CIT does not agree, it cannot be treated as an erroneous order, prejudicial to the interests of the Revenue. 21. ITAT Mumbai Bench in case of Frigsales (India) Ltd., SOT 376 held that a receipt which is not in the nature of income cannot be taxed as income u/s.115JA. The head notes of the case reads as under:- Section 115JA, read with section 50, of the Income-tax Act, 1961 -Minimum alternate tax - Assessment year 1998-99 - Whether a receipt, which 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 intend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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