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TMI Blog2019 (1) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... able in the two years, which are inter-connected. The assessee had availed of a loan from Government of India (for short "GOI"), the outstanding in which was Rs. 574.46 crores as on 31.03.2004 and Rs. 619.40 crores as on 31.03.2005. The assessee had applied for a waiver of interest on loan, as also partial/total conversion of the unsecured loans into equity, which was under consideration by GOI. 2. By order dated 31.03.2003 the GOI approved deferment of interest outstanding as on 31.03.2003. Hence, no provision for interest was made in the accounts for the year ending 31.03.2004. For the following year, ie., ending 31.03.2005, the assessee provided a provision for interest on Rs. 50,97,23,074/- for the financial year 2004-05. Later, before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting, the Assessing Officer proceeded to assess the book profits under Section 115JB in the second year, ie., 2006-07 as if the revised assessment order had not been passed. Tax was demanded on the book profit, under Section 115JB coming to Rs. 40,24,85,349/-. In fact the order under section 263 was passed for the assessment year 2005-06, later to the assessment order for the next assessment year 2006-07. 4. The questions of law arising in the appeals for the respective years are re-framed as under:- 1. Whether the assessee was entitled to revise the return for the year 2005-06 on the basis of the subsequent waiver of interest granted by GOI when the interest had accrued in the financial year and had to be treated as a liability for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and there is no contention taken regarding the limitation having worked out against the assessee. In such circumstances on that basis alone the subsequent assessment passed in the year 2006-07 has to be found to be without any authority. 8. Further, it is to be noticed that the issue arise only if there exists a book profit for the year 2006-07; which would not be there if the revised assessment for the assessment year 2005-06 is permitted to stand. Only if the adjustments for the earlier year were not permitted, the book profit would turn positive by virtue of the credit made to the profit and loss account; of the provision for interest for the two years. We find that there is no question of accrual of interest, especially since the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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