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2017 (6) TMI 1262

not computed by the Assessing Officer in the order dated 28.12.2007 passed under section 143(3)/263 and by treating such non-computation as the mistake apparent from record, the same was rectified by the Assessing Officer under section 154 by computing the book profit of the assessee under section 115JA. - As rightly contended by the assessee in this regard, the issue of book profit under section 115JA involves charging as well as computation and these two parts being inseparable, they cannot be seen in isolation. Even if one of these two parts is debatable, the entire issue relating to book profit under section 115JA becomes debatable. - The computation of such book profit in the facts and circumstances of the case of the assessee-company, which is engaged in the business of manufacturing of tea was a debatable issue as rightly contended by the assessee keeping in view the applicability of Rule 8 of the Income Tax Rules, 1962 as well as the involvement of slump sale and this position is clearly evident from the fact that the book profit of the assessee-company at three different stages was worked out by the Assessing Officer at three different figures. The computation pa .....

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the normal provisions of the Act, but did not compute the book profit under section 115JA, although certain observations were made by him as regards the computation of book profit under section 115JA in the body of the fresh assessment order. In the appeal filed against the order dated 28.12.2007 passed by the Assessing Officer under section 143(3)/147, specific grounds were raised by the assessee challenging the said observations made by the Assessing Officer. However, keeping in view that there was no computation of book profit made by the Assessing Officer in order dated 28.12.2007 passed under section 143(3)/263, the ld. CIT(Appeals) dismissed the said ground treating the same to be premature. While giving effect to the order of the ld. CIT(Appeals) dated 09.04.2008, vide an order dated 19.11.2008 the Assessing Officer computed the book profit of the assessee-company under section 115JA at the same figure as was computed earlier in the assessment made under section 143(3)/147 vide an order dated 27.12.2005. Against the said order dated 19.11.2008 passed by the Assessing Officer, an appeal was preferred by the assessee before the ld. CIT(Appeals) and while disposing of the said .....

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ofit under section 115JA and the same being apparent from record, was rectifiable under section 154. He accordingly passed an order dated 17.11.2009 under section 154 computing the book profit of the assessee-company under section 115JA for the year under consideration at ₹ 2,42,22,069/-. 4. Aggrieved by the order of the Assessing Officer under section 154, an appeal was preferred by the assessee before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT(Appeals), invocation of the provisions of section 154 by the Assessing Officer was challenged by the assessee, inter alia, on the ground that noncomputation of book profit under section 115JA by the Assessing Officer in the order dated 28.12.2007 passed under section 143(3)/263 was not a mistake apparent from record and the issue relating to computation of book profit being a highly debatable issue was beyond the scope of section 154. The ld. CIT(Appeals) did not find merit in the case of the assessee on this issue. According to him, non-computation of book profit by the Assessing Officer in the order dated 28.12.2007, despite some observations made by him on merit relating to the said computat .....

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shows that the said issue is highly debatable on which no rectification is permissible under section 154. He contended that even the CBDT has to issue a Circular in this context clarifying that only 40% of the profit is to be taken as book profit in the case of tea manufacturing company by treating the balance 60% as agricultural income. He also contended that there was another issue involved in the year under consideration in the case of the assessee relating to slump sale and the same made the computation of book profit more debatable. 6. The ld. D.R., on the other hand, contended that the book profit under section 115JA was required to be computed in the case of the assessee for the year under consideration and there cannot be any doubt about it. He submitted that the Assessing Officer, in fact, had raised query during the course of relevant assessment proceedings about computation of book profit and this issue was very much under consideration going by the observations made by him in the main body of the assessment order. He submitted that the Assessing Officer, however, finally omitted to compute the book profit due to oversight and this omission being a clear mistake apparent .....

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