TaxTMI 
TaxTMI 
2010 (4) TMI 682
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....e fact that the assessee had not disputed the rejection of recasted Profit and Loss a/c and revised Form No. 29B either before the CIT(A) or before the ITAT. (iv) The learned CIT(A) erred in not appreciating the fact that the tax liability under the normal provisions was more than the MAT liability, as per the total income computed in the assessment order as well as the order giving effect to the CIT(A) order and therefore, there was no necessity to show the computation of tax liability under section 115JB in those orders. (v) The learned CIT(A) ought to have appreciated the fact that in the order giving effect to ITAT's order, the MAT liability was more than the tax liability determined under normal provisions and, therefore, as the Assessing Officer had not computed the MAT liability and had not raised demand on the basis of MAT liability, there was a mistake apparent from record requiring rectification under section 154. (vi) The learned CIT(A) ought to have appreciated that when once the Profit and Loss a/c and balance sheet was approved by the shareholders, in the General Body meeting, the same could not be re-casted to arrive at a different figure of profit for purpo....
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.... before the CIT(A). The CIT(A) in his order dated 13-12-2004 has allowed the claim of the assessee with regard to the sum of Rs. 25 crore claimed in the revised claim of the assessee at para 9.1 of his order but has directed that the same should be taxed as capital gains. 3.2 Both the assessee and the revenue were before ITAT against the order of the CIT(A). The ITAT vide their order dated2-1-2006 has adjudicated on this amount of Rs. 25 crore to be not taxed at all. 4. The order of the Tribunal was given effect to by the Assessing Officer vide his order dated 13-9-2006. Consequent to giving effect to the ITAT's order, the business loss was revised at (-) Rs. 19,44,25,832 and long-term capital loss was assessed at (-) Rs. 2,82,75,286 under normal computation. The Assessing Officer, realizing that the book profits of Rs. 4,93,42,945 was omitted to be brought to tax under section 115JB vide his order dated 13-9-2006 (Order giving effect to ITAT order dated 2-1-2006), issued a notice under section 154 of the Act calling for assessee's objection. In response, assessee vide his letter dated12-6-2007 raised the following contentions :- (i) Your attention is drawn to the recast p....
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....T on this issue. Hence, the present order under section 154 is bad in law. This is the issue raised in ground Nos. 2(c) and (d). The order now passed is under section 154 hence, is bad in law. The same be cancelled. 3. The conclusion that the then Assessing Officer in the order dated 30-3-2004 has not computed the income under section 115JB as the income computed under normal provision was more than the book profit under section 115JB mentioned in para 2 of present order is not supported by any documental evidence. Hence, the present order passed be cancelled. 4. It is a well known principle that an issue involved is a debatable question; the same cannot be subject of a rectification. T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). The contention of the Assessing Officer that the then Assessing Officer has not computed MAT as the tax payable under section 143(3) order was more - is a debatable question and hence, present order passed under section 154 levying MAT without discussing the claim of assessee is bad and the same be cancelled. 5. Conceding for arguments sake, if the Assessing Officer is of the opinion MAT has not been levied on the assess....
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....cal know-how under the head 'Capital gains' by excluding the same from business income. The Assessing Officer gave effect to CIT(A)'s order on 13-1-2005and determined the income at Rs. 9,15,33,500 and tax payable at Rs. 2,07,04,585. This order was subsequently rectified under section 154 on 15-4-2005determining the income at Rs. 1,37,31,210 and tax payable at Rs. 31,03,253 and the refundable amount of Rs. 62,63,484. The assessee went to ITAT against the order of CIT(A) and the Hon'ble ITAT vide its order dated 24-1-2006 partly allowed the appeal of the appellant and dismissed the appeal of the revenue. The ITAT held that Rs. 25 crores is capital receipt and not liable for capital gains. The Assessing Officer gave effect to ITAT's order on 13-9-2006 determining the total income of business at Rs. 19,44,25,832 and long-term capital loss to Rs. 2,82,75,286. The Assessing Officer again issued notice under section 154 on 4-6-2007 proposing to rectify the mistake. The appellant objected to the proposed rectification as the issue involved is a debatable question not to be subject of rectification. The Assessing Officer rejected and rectified the order ignoring the direction issued by CIT(....
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....ard of unabsorbed loss was a mistake apparent and there was material on record justifying rectification." 9.1 It was further submitted that once the profit and loss account and balance sheet was approved by the shareholders in the General Body Meeting, the same could not be recast to arrive at a different figure of profit for the purpose of determining tax liability under section 115JB of the Income-tax Act. For this proposition, the learned DR relied on the decision of the Tribunal in the case of Gujarat State Petroleum Corpn. Ltd. v. Jt. CIT [2010] 123 ITD 335 (Ahd.), wherein it was held : "The Assessing Officer was right in accepting only the accounts, which were approved by the annual general meeting and placed before the auditor of the company as well the Registrar of the Companies." 9.2 It was further contended by the learned DR that the so-called revised statement declaring NIL tax liability under the MAT provision was filed only on18-3-2004, few days before the completion of the assessment and the same was beyond the period prescribed under section 139(5) of the Act. It was stated that the Assessing Officer in the assessment completed on 30-3-2004 had rejected the ....
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....ithin the precincts of law and permitted under section 154 of the Income-tax Act. In taking the above view, we are fortified by the decision of the Hon'ble Kerala High Court in the case of CIT v. Malayala Manorama Co. Ltd. [2002] 253 ITR 378 (though the Kerala High Court decision was reversed by Supreme Court, on different points) the relevant facts considered by Hon'ble High Court of Kerala is as follows :- "In the return for the assessment year 1988-89, the assessee declared a loss of Rs. 1,12,293 and claimed a refund of tax of Rs. 8,62,730. The Deputy Commissioner rejected the return and assessed the taxable income at Rs. 47,26,270 and imposed a tax of Rs. 25,99,448 and a surcharge of Rs. 1,29,972. The assessing authority did not allow the deduction claimed under section 80VVA on the ground that the provision stood omitted with effect fromApril 1, 1988, and, after adjusting the advance tax paid and the tax deducted at source inclusive of interest, imposed a tax of Rs. 26,83,327. The Commissioner (Appeals) ordered modification of the order of assessment by upholding some of the claims of the assessee and directed the Assessing Officer to consider the claim of the assessee rela....
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....the returned income under section 115JB of the Act, which is not permissible as per the dictum laid down by the Hon'ble Supreme Court in the case of CIT v. Shelly Products [2003] 261 ITR 367. For the aforesaid reasons, we are of the view that the CIT(A)'s order is not correct and not in accordance with law and accordingly, we reverse the same and allow the grounds of the revenue. 12-13. In the result, the appeal filed by the revenue is allowed. C.O. No. 44/Bang./2009 14. The following questions are raised by the assessee in the cross objections :- (i) The Assessing Officer has overlooked the decision of the CIT(A) that revised accounts filled on12-3-2004 must be accepted and if the same are accepted no tax is payable under section 115JB. (ii) The learned CIT(A) has failed to appreciate that Assessing Officer has got no power to recast the accounts and submitted that as held by Supreme Court in Apollo Tyres as such no tax is payable under section 115JB. 14.1 With regard to first question, the revised accounts and the Form No. 29B is dated12-3-2004 and the same was submitted to the Assessing Officer on18-3-2004. As stated in the order of the Tribunal in ITA No. 724/....