9911796707
TMI Blog2022 (8) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... lved in these appeals are common, the same have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. First, we shall take up the assessee's appeal for Assessment Year 2013-14 being ITA No.394/SRT/2018 which is directed against the order of the learned CIT(A)-1, Vadodara dated 08.03.2018. 3. Ground Nos. 1 & 2 raised by the assessee in this appeal for AY 2013-14 involve a common issue relating to the addition of Rs.12,52,745/- made by the Assessing Officer and confirmed by the learned CIT(A) by restricting the claim of the assessee for depreciation on electrical fittings to 10% instead of 15%. 4. The assessee, in the present case, is a company which is engaged in the business of Port and Terminal Operations. The return of income for the year under consideration i.e. AY 2013-14 was filed by the assessee on 27.09.2013 declaring a total income at Rs. Nil, after setting off brought forward unabsorbed depreciation to the extent of Rs.35,93,21,210/-. Book profit under Section 115JB of the Income-tax Act, 1961 ("the Act" in short) was declared by the assessee in the said return at Nil after setting off unabsorbed business loss to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Road Transport Corporation, (2014) 366 ITR 170 (Guj.). Respectfully following the said judgment of Hon'ble jurisdictional High Court, we uphold the impugned order of the learned CIT(A) confirming the disallowance made by the Assessing Officer on account of belated payment of employees' contribution towards Provident Fund and dismiss Ground No.3 of assessee's appeal for AY 2013-14. 7. The issue involved in Ground No.4 of the assessee's appeal relates to the addition of Rs.15,14,241/- made by the Assessing Officer and confirmed by the learned CIT(A) on account of short receipts allegedly declared by the assessee as compared to the receipts reflected in 26AS. 8. Contractual receipts, rent and professional fees aggregating to Rs.15,14,241/- as reflected in 26AS were not disclosed by the assessee in the return of income. In this regard, the explanation offered by the assessee that the said amounts were received as advances and hence not to be treated as income for the year under consideration was not found acceptable either by the Assessing Officer or by the learned CIT(A) in the absence of documentary evidence furnished by the assessee to support and substantiate the same. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any has gone into restructuring and in view of the provisions of Section 100 to 104 of Companies Act, 1956, the capital reduction arrangement was made. This capital reduction arrangement was duly approved by the Hon'ble Jurisdictional High Court vide order dated 08.10.2010. It is claimed that in the process of restructuring, due to capital reduction arrangement, the business losses and unabsorbed depreciation were adjusted against the share capital and reserves and surplus in order to bring a better net worth of the company. The Ld. AR has furnished details of unabsorbed business loss, and depreciation from AY 2002-03 to AY 2010-11 totaling to Rs.58,84,54,570/-. The Ld. AR has heavily submitted that even after restructuring of the business and reduction of capital after adjusting the brought forward business loss and unabsorbed depreciation, the same remained to be adjusted against book profit u/s 115JB. In this regard, he has relied upon the decision of the Hon'ble Jurisdictional ITAT in the case of Surat Textile Mills Ltd. vs DCIT (2016) 70 taxmann.com 158 (Ahd), which stands confirmed by the Hon'ble High Court vide order reported as 79 taxmann.com 209 (Guj), wherein, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls Ltd, (2017) 79 taxmann.com 209, wherein it was held as under:- "Section 115JB of the Income-tax Act, 1961 - Minimum alternate tax - Payment of tax (Unabsorbed depreciation) - Assessment year 2012-13 - Assessee-company was declared as sick industry - Consequently, as per rehabilitation scheme, all credit amounts of capital nature, like, equity share capital account, secured loan accounts etc. were transferred to credit of rehabilitation account and said credit was, then, used to adjust debit balance of profit and loss account - On assessee's net worth became positive, assessee deducted unabsorbed deprecation from book profits to calculate minimum alternate tax - Assessing Officer disallowed said deduction - Whether restructuring credits brought into profit & loss account against accumulated debit balance while giving effect to rehabilitation scheme would not extinguish loss and depreciation from accounts of assessee in actual terms - Held, yes - Whether such loss would be available as per accounts prepared under Parts-II and III of Schedule-VI of Companies Act and, therefore, assessee will be entitled to claim reduction of loss/unabsorbed depreciation, whichever is lower, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the sides, this issue is squarely covered in favour of the assessee inter alia by the decision of Hon'ble Karnataka High Court in the case of CIT v . GMR Industries Ltd., [2020] 425 ITR 504, wherein it was held that prior period expenses charged to profit and loss account cannot be deducted from the profit of the year for the purpose of computing book profit under Section 115JB of the Act as the same does not fall within the purview of Section 115JB of the Act. To the similar effect is the decision of Mumbai Bench of this Tribunal in the case of Shivshahi Punarvasan Prakalp Ltd. Vs. ITO, (2012) 135 ITD 51 (Mumbai), wherein it was held that there is no provision for any adjustment on account of prior period expenses in Explanation-1 to Section 115JB(2) of the Act and, therefore, any addition on account of disallowance of prior period expenses while computing book profit is not permitted. Respectfully following these judicial pronouncements, we uphold the impugned order of the learned CIT(A) deleting the addition of Rs.31,26,316/ made by the Assessing Officer on account of prior period expenses while computing the book profit of the assessee-company under Section 115JB of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
