9911796707
TMI Blog2023 (3) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... d.CIT(A) confirmed the addition in a rectification order passed by the AO under section 154 of the Act. 2. Grounds raised by the assessee are as under: 1. The learned Commissioner of Income Tax (Appeals) -4, Vadodara ["CIT(A)"] erred in fact and in law in confirming the action of the learned Assistant Commissioner of Income Tax, Panchmahal Range, Godhra ["the AO"] in passing order u/s 154 of the Income Tax Act, 1961 ['the Act']. 2. The learned CIT(A) erred in fact and in law in confirming the action of the Id. AO in exercising power u/s. 154 on the issue which is debatable and which cannot be rectified u/s. 154 of the Act. Addition of Rs. 17,00,00,000 u/s. 115JB of the Act 3. The learned CIT(A) erred in fact and in law in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned case was in relation to adjustment made to the book profits of the assessee by adding thereto amount of income surrendered by the assessee during survey of Rs.17 crores .The AO had noted that while the assessee had included the surrendered income for the purpose of computing its income for taxation as per the normal provision of the Act, but had not done so for the purpose of paying tax under MAT regime on the book profits of the assessee as per the section 115JB of the Act. It was noted that the assessee, while so including surrendered income of Rs.17 crores in its income computed as per the normal provisions ,had claimed benefit of MAT credit against the taxes leviable on the income computed as per the normal provision on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO vide his order passed under section 154 of the Act which was upheld by the ld.CIT(A) also. As stated above, there was survey conducted on the assessee under section 133A of the Act on 23.6.2011 at its business premises. The impugned assessment year before us is Asst.Year 2011-12. This survey was thus conducted after close of the financial year relevant to the impugned assessment year i.e. after 31.3.2011 relevant to Asst.Year 2011-12, which is impugned before us. The surrender of Rs.17 crores by the assessee during survey has been detailed in the assessment order passed by the AO dated 25.2.2014. Copy of which was placed before us in PB No.61 to 64. A perusal of the same reveals that the AO noted in his assessment order that on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of business income on account of discrepancy noticed through survey of diversion of expenses from its exempt units to its taxable units. Surrender of Rs.1018.34 lakhs in this regard was made by the assessee during the impugned. (ii)The amount of Rs.1700 lakhs surrendered by the assessee as per the assessment order was over and above and in addition to this disclosure made on account of diversion of expenses as noted above. This Rs.1700 lakhs was disclosed by the assessee under the head "income from other sources". This surrender was made by the director of the assessee- company in his statement recorded during the survey conducted on the assessee. 7. None of the orders of the authorities below i.e. the assessment order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the provisions of Schedule III to the Companies Act, 2013 (18 of 2013); or (b) being a company, to which the second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013) is applicable, shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of the Act governing such company: Provided that while preparing the annual accounts including statement of profit and loss,- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material, should have been invariably made part of its profit and loss account. That is, could the said surrender be treated as representing profits earned by the assessee to be disclosed to its shareholders in AGM, without any doubt. 12. We are in agreement with the ld.counsel for the assessee in this regard that it is surely not a clear case of the amount being invariably included in the book profits of the assessee on the basis of the facts before us. In the absence of any incriminating material found, substantiating the surrender made, the same cannot invariably be said to represent the profit of the assessee for disclosure to its shareholders. If the surrender was corroborated with some undisclosed asset or incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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