TMI Blog2020 (9) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... n clause (38) thereof) or section 11 or section 12 apply, shall be reduced from computation of book profit, if any such amount is credited to the statement of profit and loss. Assessee computed the book profits while crediting thesale consideration of agricultural land to the profit and loss account and offered thesame to tax. Obviously, it is a mistake. In view of the decision of Shelly Products [ 2003 (5) TMI 4 - SUPREME COURT] such a mistake has to be rectified by the Revenue Authorities when it is brought to their notice and they are satisfied with the genuineness of the claim. Therefore, when the ld. CIT(A) is satisfied that the income which is exempt u/s. 10 of the Act is included in the book profit u/s. 115JB, which should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act at ₹ 5,73,70,009/-. The return was processed u/s. 143(1) of the Act. Subsequently, during the assessment proceedings relating to assessment year 2010-11, ld. Assessing Officer noticed that the assessee claimed exempt income to the tune of ₹ 21,71,74,573/- on account of profit on sale of agricultural land and the ld. Assessing Officer treated the agricultural land as capital asset u/s. 2(14)(iii) of the Act and income arising out of transfer of such land under the head Long-term Capital gains . On that, ld. Assessing Officer noticed that in F.Y. 2009-10 also, the lands were sold in part and that there has been no income declared in respect of its profits of ₹ 5,58,61,180/- earned on sale of land. 3. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010-11, the ld. CIT(A) found that since the village where the sold land was located was 8 Kms away from the Municipal limits, the very basis of Assessing Officer for reopening the assessment proceedings for the AY 2009- 10has no locus standi , as the Assessing Officer himself admitted the said fact. He, therefore, allowed the contention of the assessee on that ground. 7. Ld. CIT(A) further considered the contention of the assessee that under the provisions of section 115JB(2)(k)(ii) of the Act, the profits derived from sale of an agricultural land, which is exempt u/s. 10 of the Act, has to be reduced from the book profits and therefore, the assessee is entitled to relief even in respect of the amount that was offered to tax. Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the authority given under law because when the assessee himself offered certain income by crediting the same to the profit and loss account, it is not open for the CIT(A) to tinker with the financials of the assessee and to grant relief. He, therefore, prayed that grant of relief given by CIT(A) in so far as the tax offered is concerned, is unsustainable. 10. Per contra, the ld. AR submitted that the profits earned on sale of agricultural land within the meaning of section 2(14) are exempt u/s. 10 of the Act and therefore, ld. CIT(A) followed the provisions of section 115JB(2)(k)(ii) of the Act and in that process, no question of tinkering with the accounts of assessee arises,but it is only after taking the book profits of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it an admitted fact that the land that was sold was located in village Kishora, which is more that 8 kms away from municipal limits and the profits earned on sale of such land are exempt u/s. 10 of the Act. Further, provisions of section 115JB(2)(k)(ii) provide that the amount of income to which any of the provisions of section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply, shall be reduced from computation of book profit, if any such amount is credited to the statement of profit and loss. In this matter, the assessee computed the book profits while crediting thesale consideration of agricultural land to the profit and loss account and offered thesame to tax. Obviously, it is a mistake.I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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