TMI Blog2023 (11) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s. 115JB - As per the requirement under Companies Act, assessee has to submit the consolidated financial statements of the assessee company where assessee has stepdown subsidiaries and associate companies. Accordingly, assessee has submitted along with its financial statements, a consolidated financial statements of the group company being a holding company of its subsidiaries and its associates. The stepdown subsidiaries and other associate companies are independent assessees in the eyes of law and they have declared their financial statements and profits independently and filed the relevant return of income. Therefore, the Profit and Loss declared by the subsidiaries and associate companies cannot be assessed to tax in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in Assessment Order. Accordingly, notices u/s. 143(2) and 142(1) of the Act were issued and in response Ld. AR of the assessee submitted relevant information as called for. The assessment u/s 143(3) r.w.s. 143(3A) 143(3B) of the Act was passed on 11.02.2021 assessing total income at ₹. 50,67,670/- by making addition of ₹. 55,301/- on account of disallowance u/s 14A of the Act, disallowance of ₹. 4,37,499/- u/s 43B of the Act and disallowance of ₹. 45,74,868/- u/s 36(1)(vii) of the Act. 3. Ld. Pr.CIT, Mumbai 2 while verifying the assessment records observed certain errors in Assessment Order rendering the same as erroneous in so far as it is prejudicial to the interest of the Revenue. Accordingly, he issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, Ld. Pr.CIT vide letter dated 28.03.2023 explained that the figure of ₹. 1,80,91,596/- is, in fact, the figure of book profits of the Consolidated Financial Statements of Polygel Industries Pvt. Ltd., and the amount which the assessee was speaking of, pertains to the Standalone Financial Statements of Polygel Industries Pvt. Ltd. Thus, the assessee has contradicted themselves on the impugned issue. He observed that there is no clarity and explicit statement on the issue. 6. Ld. Pr.CIT observed that the assessee has submitted two different versions as appearing in their submissions that the assessee is not categorical on its submission. The figure of Book Profits has been taken by the department from the copy of the Profit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven submitted to the Ld. PCIT in submission dated 28/03/2023, however, it was not considered by the Ld. PCIT. 4) The appellant craves leave to amend, alter or add a new ground which may be necessary at the time of hearing. B. Tax effect relating to each Ground of appeal: NIL since the appeal is filed against very order of PCIT ordering reopening of assessment. 8. At the time of hearing, Ld. AR brought to our notice relevant facts on record and findings of the Ld. Pr.CIT. In this regard, he submitted that the book profit adopted by the Assessing Officer is proper book profit adopted from the Profit and Loss Account of the company declared as per the financial statements prepared under Companies Act. He submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 12. Considered the rival submissions and material placed on record, we observe that while examining the assessment records Ld. Pr.CIT has observed that the profit declared by the assessee in its standalone financial statements is ₹. 68,53,323/- whereas the profit declared in the consolidated financial statements is ₹. 1,80,91,596/-, since he is not convinced with the submissions of the assessee and the profit adopted by the Assessing Officer for the purpose of section 115JB is not proper, he came to the conclusion that the order passed u/s. 143(3) is erroneous in so far as it is prejudicial to the interest of the Revenue. 13. On careful perusal of the submissions made by both the parties, we observe that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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