Tribunal rejects appeals due to non-compliance with Accounting Policies for book profits

The Tribunal dismissed all three appeals filed by the assessee for A.Y. 2012-13, 2013-14, and 2014-15, as the appellant's accounts did not adhere to the required Accounting Policies and Standards for computing book profits u/s. 115JB. The principle of consistency was deemed inapplicable in this context.

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Issues Involved:
Appeals against orders of Ld. CIT(A) for A.Y. 2012-13, 2013-14, and 2014-15 regarding computation of book profits u/s. 115JB of the Income Tax Act.

Analysis:

Issue 1: Computation of Book Profits
The appellant contested the addition of Rs. 6,47,41,354 to the book profit computed u/s. 115JB. The dispute arose due to the company's decision to pay an additional cane price after the annual accounts were approved. The Assessing Officer disallowed this claim, stating that the re-cast accounts did not align with Accounting Policies and Standards. The Ld. CIT(A) upheld this decision, citing the Apollo Tyres Ltd. case. The appellant argued for the right to prepare separate accounts for tax purposes, emphasizing consistency and referring to the Radhasoami Satsang case. However, the Tribunal held that the legislative intent requires uniformity in accounting policies for both Companies Act and Income Tax Act purposes. As the appellant's accounts did not align with this requirement, the appeal was dismissed.

Issue 2: Principle of Consistency
The appellant invoked the principle of consistency, claiming that similar claims were allowed in previous years. However, the Tribunal clarified that this principle applies when two legal views are possible, and the Assessing Officer's approach is legally valid. As the AO's decision was in line with established law, the principle of consistency did not apply in this case. Therefore, the Tribunal dismissed the grounds of appeal based on this argument.

Final Decision:
The Tribunal dismissed all three appeals filed by the assessee for A.Y. 2012-13, 2013-14, and 2014-15, as the appellant's accounts did not adhere to the required Accounting Policies and Standards for computing book profits u/s. 115JB. The principle of consistency was deemed inapplicable in this context. The orders were pronounced on June 29, 2022.

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