TMI Blog2018 (12) TMI 1974X X X X Extracts X X X X X X X X Extracts X X X X ..... he same could not be done by invoking Sec. 154 of the Act, which permitted the AO merely to rectify apparent mistakes. Points of difference between computation of book profit made by the Assessing Officer and that by the assessee were such, which involved debatable issues, and thus was outside the purview of Sec. 154 of the Act. So far as the assessee was concerned, it had cleared its stand which was very much before the Assessing Officer when he passed the original assessment order. Thus, the error of assessee not having declared its manner of computation of book profit under Section 115JB of the Act is not something which is reflected by the record. No doubt, the CIT(A) is justified in referring to the amendment made by the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Grounds of appeal, but the entire dispute emanates from an order passed by the Assessing Officer under Section 154 of the Act amending/rectifying the assessment order passed under Section 143(3) of the Act dated 28.02.2013 determining the book profit under Section 115JB of the Act of ₹ 6,95,57,438/-. The said action of the Assessing Officer has since been upheld by the CIT(A), against which assessee is in further appeal before the Tribunal. 3. Insofar as the relevant facts are concerned, the same can be appreciated as follows. An assessment under Section 143(3) of the Act dated 28.02.2013 was completed by the Assessing Officer determining the total income at NIL, which corresponded to the returned income. Subsequently, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposed rectification. The submission made by the assessee is considered but not found acceptable for the reason that the liability u/s 115JB is worked out incorrectly. Since the mistake is apparent from the record, the assessment is rectified under section 154 of the I.T. Act. Revised accordingly. Total income as per order dated 28-02-2013 remains unchanged to Rs. Nil but income u/s 115JB will be revised as under: Net profit as per P/L Account 3,72,43,272 Add : Provision for Bad Doubtful Debts 2,25,37,650 Provision for Doubtful Advances 86,72,263 Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee pointed out that the judgment of the Hon'ble Madras High Court in the case of Tamil Nadu Cements Corpn. Ltd. vs JCIT, 349 ITR 58 (Mad) as well as the Hon'ble Kolkata High Court in the case of ICI (India) Ltd. vs CIT, 347 ITR 442 (Cal) brought out that the impugned adjustment was impermissible. The CIT(A) considered the submissions put forth by the assessee, but has merely gone by the ratio of the judgment of the Hon'ble Karnataka High Court in the case of CIT vs Mysore Breweries Ltd. (2009) 227 CTR (Kar) 569 and the amendment made by the Finance (No. 2) Act, 2009 w.e.f. 01.04.1998 on the point that while determining the book profit, the amount relatable to Provision for bad and doubtful debts was not a deductible elemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as what was required to be adopted was ₹ 88,26,173/- as done by the assessee, as against ₹ 3,72,43,272/- adopted by the Assessing Officer. The difference between the two was on account of prior period expense of ₹ 2,84,17,099/-, which had not been allowed by the Assessing Officer. In support of his stand that such expense was allowable for computing the book profit, reliance was placed on the judgment of the Hon'ble Madras High Court in the case of Tamil Nadu Cements Corpn. Ltd. (supra). At the time of hearing, the learned representative for the assessee also relied upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs Khaitan Chemicals Fertilizers Ltd., 307 ITR 150 (Delhi) for the said pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious and patent mistake. It is also well understood that even debatable points of law would not fall in the meaning of the expression mistake apparent for the purposes of Sec. 154 of the Act. 10. In this background, we may now examine the facts of the present case. As per the relevant observation of the Assessing Officer in the notice issued under Section 154 of the Act dated 06.12.2013 (a copy of which is enclosed at page 6 of Paper Book) as well as in the order passed under Section 154 of the Act, invoking of Sec. 154 of the Act has been justified to determine the liability under Section 115JB of the Act primarily on the ground that the assessee had not offered tax under Section 115JB of the Act and therefore, there was an under-a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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