TaxTMI 
TaxTMI 
2016 (3) TMI 367
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....on facts in deleting the addition of Rs. 96,30,992/- made by A.O. on account of sale of carbon credit treating it as income of the assessee." 3. Ld. DR of the Revenue supported the assessment order whereas the Ld. AR of the assessee supported the order of the Ld. CIT(A). He also submitted that the issue is squarely covered in favour of the assessee by the judgment of the Hon'ble Andhra Pradesh High Court rendered in the case of CIT Vs. My Home Power Ltd. reported in 365 ITR 82. He has submitted that copy of this judgment is available on pages 181 to 182 of the paper book. He has also submitted that the Tribunal's order in the same case is also available on pages 183 to 195 of the paper book and the same was reported in 63 SOT 227. He also placed reliance on a Tribunal's order rendered in the case of Ambika Cotton Mills Ltd. Vs. DCIT reported in 61 SOT 31 copy available on pages 196 to 199 of the paper book. 4. We have considered the rival submissions. We find that the issue in dispute as per Ground No. 1 of appeal is regarding nature of receipt on account of sale of carbon credit and in the case of CIT Vs. My Home Power Ltd. (Supra) also, the dispute before Hon'ble Andhra Pra....
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....enditure and Rs. 6,78,700/- out of the expenses claimed as repair and maintenance expenses. Ld. CIT(A) restricted these two disallowances to Rs. 1.00 lakh under each head. Against the aforesaid relief allowed by the CIT(A), Revenue was before the Tribunal and the Tribunal declined to interfere in the order of Ld. CIT(A) in that year on both these issues on this basis that the Assessing Officer has not pointed out any specific defect in the maintenance of account but at the same time, the assessee has not placed any evidence on record to justify that all expenses claimed by the assessee are duly vouched and open for verification. The Tribunal held in that year that under these circumstances, there is no infirmity in the order of Ld. CIT(A) who has restricted the addition to Rs. 1.00 lakh under each head. In the present year also, these two disallowances were made by the Assessing Officer on general basis without pointing out any specific defect in the books of account of the assessee and at the same time, the assessee also could not establish that all the expenses are duly vouched and are open for verification. Hence, it is seen that the facts in the present year are similar to the ....
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.... have considered the rival submissions. We find that the decision of Ld. CIT(A) on this issue is as per following paras on pages 18 and 19 of his order which are extracted as under:- "I have gone through the facts and circumstances of the case. It is seen that the assessee had created the fund for creation of tank for molasses. This was as per the directions by the Central Government under the Molasses Control (Amendment) Order, according to which the assessee was directed to keep this amount under a separate account under the head "Molasses storage fund". Though the assessee collected this amount under the statutory obligation, it did not belong to the assessee, but to the molasses storage fund. The assessee could not utilize the amount in the said fund for any other purpose. The fund had to be utilized for the purpose of constructing a storage tank in accordance with the specifications given by the Central Government. Therefore, there was diversion of title at the source of the income collected under the directions given under the Molasses Control (Amendment) Order. The sum in question was not includible in the assessee's total income. This is also the view contained in ....
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...., then there is no need to show such high sale price of Rs. 120 to Rs. 150 per quintal for about 51,500 Quintals out of total sale of 615,631 Quintals. This has been deleted by the Ld. CIT(A) on this basis that there is no evidence in the possession of the Assessing Officer which goes to prove that the assessee had actually sold the declared bagasse at Rs. 80 per qtl. or at a higher rate then what has been declared by the assessee and in the absence of such information or evidence, no addition can be made in the hands of the assessee. In the facts of the present case, we find no infirmity in the order of Ld. CIT(A) on this issue. Therefore, this Ground is rejected. 18. The Ground No.7 of the Revenue is as under:- "7. That the order of Ld CIT(A) is erroneous in law and facts in deleting the addition of Rs. 34,58,297/- made by A.O. under the head provision of interest on extra levy price." 19. Ld. DR of the Revenue supported the assessment order whereas Ld. Ld. AR of the assessee of the assessee supported the order of the Ld. CIT(A). 20. We have considered the rival submissions. This issue has been decided by the Ld. CIT(A) by way of on cryptic order of two lines wh....
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.... and 3 of departmental appeal)." 25. It was submitted that by Ld. AR of the assessee that these grounds are interconnected with Ground No. 2 and 3 raised by the Revenue in its appeal and these are also covered by the same Tribunal's order in assessee own case for Assessment Year 2007-08. 26 Ld. DR of the Revenue supported the assessment order. 27. We have considered the rival submissions. We find that in Assessment Year 2007-08 also, disallowance of Rs. 1.00 lakh under each of these two heads were confirmed by the ld. CIT(A) and the order of Ld. CIT(A) in that year was also confirmed by the Tribunal and no difference in facts could be pointed out by the Ld. Ld. AR of the assessee and therefore, in the present year, these two issues are decided against the assessee and accordingly these grounds of the CO are rejected. 28. In the result, CO of the assessee is dismissed. 29. Now, we take up the appeal of the Revenue for Assessment Year 2009-10 i.e. 418/Lkw/2013. 30. The Ground No.1 of the Revenue is as under:- "1. That the order of the learned Commissioner of Income tax (Appeals) is erroneous in law and on facts in deleting the addition of Rs. 2,77,08,800/-m....
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....ce in the present year, the assessee disclosed the yield of bagasse at 34.69%, the addition made by the Assessing Officer by adopting yield of bagasse at 36% is not justified. We, therefore, decline to interfere in the order of Ld. CIT(A) on this issue. Accordingly, Ground No. 4 of the Revenue is rejected. 37. In the result, appeal of the Revenue is dismissed. 38. Now, we take up the CO filed by the assessee for Assessment Year 2009-10 i.e. CO No. 27/Lkw/2013. 39. It was submitted by Ld. AR of the assessee that the CO is withdrawn and accordingly, this CO of the assessee is dismissed as withdrawn. 40. In the result, CO of the assessee is dismissed. 41. Now, we take up the appeal of the assessee for Assessment Year 2009-10 i.e. ITA No. 339/Lkw/2013. 42. The grounds raised by the assessee in this appeal are as under:- "1. For that learned AO was wrong in completely ignoring the facts that assessee has business loss of Rs. 24.97 Crore and Rs. 20.78 Crore as per return and as per assessment order, respectively. That such loss is kept apart for carry-forward. Therefore, there was no computation of 'Gross Total Income' from which deductions under Chapter VI-A c....
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....Ltd. which has been approved by the Calcutta High Court, and attained finality, and other judgments of Calcutta Tribunal which also have attained finality, section 115JB is not applicable in assessee's case for the year under consideration. 6. For that learned CIT(A) was wrong in confirming disallowance on estimated basis to the extent of Rs.one lakh out of Miscellaneous Expenses and Rs. one lakh out of repairs and Maintenance Expenses with his contention for both items that "However to plug any possible lacunas, it is fair and just to sustain an addition of Rs. 1,00,000/- in order to cover up for any deficiency" . 7. In view of size and nature of organization, location of sugar mill, internal check and control system, audit system, fact that major payments are made through banking channels and tax has also been deducted wherever applicable, and also petty nature of some of other expenses the disallowances out of miscellaneous expenses Rs, one lakh and out of repair and maintenance expenses Rs. one lakh totaling Rs. two lakh may kindly be deleted fully. 8. For that during pendency of this appeal, the learned AO may be directed not to press for disputed du....
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.... present case, the relevant Section is 115JB of the Act. 46. We have considered the rival submissions. We find that in the case of Tribunal's order rendered in the case of DCIT Vs. Vishnu Sugar Mills Ltd. (Supra), the assessment year involved was Assessment Years 1996-97 to 2001-02. Provisions of Section 115JA are applicable in respect of any previous year relevant to the assessment year commencing on or after 1st April, 1997 but before the 1st April, 2001. As per provisions of Section 115JA of the Act, if the total income computed under this Act is less than 30% of book profit then the total income of such assessee chargeable to tax for the relevant previous year shall deem to be the amount equal to 30% of such book profit. Section 115JB has been inserted by Finance Act, 2000 w.e.f. 1.04.2001 and as per the provisions of this Section 115JB, instead of comparing the taxable income and book profit as prescribed in Section 115JA, the comparison has to be made with regard of the tax payable under the normal provisions of the Act with a prescribed rate of tax on book profit and if such tax payable under normal provisions of the Act is less than seven and half percent of book profit ....
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....o gross total income assessed in the assessment order, Section 115JB will not be applicable and it was also noted in the same question that as per the provisions of Section 115JB of the Act, it is clear that if tax payable on the total income as computed under the Act is less than 7.5% of book profit then the book profit shall be deemed to be total income of the assessee and tax payable by the assessee on such total income shall be amount of income tax rate of 7.5%. But in spite of this specific question, the judgment of the Hon'ble Kolkata High Court is not a speaking judgment and it was held by the Hon'ble Kolkata High Court that from the perusal of the Tribunal order, it appears that the Tribunal has extensively dealt with the matter and no substantial question of law is involved in that case. Under these facts, in our considered opinion, this judgment of Hon'ble Kolkata High Court does not lay down a binding precedent that too out of its own jurisdiction. We also find that the Tribunal order in the case of DCIT Vs. Vishnu Sugar Mills Ltd. (Supra), for Assessment Year 2003-03 is also available on page 91 of the paper book and in this Tribunal order, there is no discussion and Tr....
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....ase of M/s Shree Cement Ltd. Vs. The Addl. CIT in ITA No.503/JP/2012 dated 27.01.2014. He submitted a copy of this Tribunal's order. In particular, our attention was drawn to Para 40 of this Tribunal's order. It was submitted in that case also, same issue was before the Tribunal as to whether the receipt on account of carbon credit is to be reduced from book profit u/s 115JB of the Act or not and the Tribunal has decided this issue in favour of the assessee. He also placed reliance on another Tribunal's order rendered in the case of ACIT Vs. M/s Shree Cement Ltd. in ITA Nos. 614, 615 & 635/JP/2010 dated 09.09.2011. He submitted that the copy of this Tribunal's order is available from pages 163 to 180 of the paper book. He further pointed out that in this Tribunal's order, the Tribunal has duly considered the judgment of the Hon'ble Apex Court in the case of Apollo Tyres Ltd. vs. CIT reported in 255 ITR 273 and decided the issue in favour of the assessee by following another judgment of the Hon'ble Apex Court rendered in the case of Padma Sundara Rao Vs. State of Tamil Nadu reported in 255 ITR 147 (SC), wherein it was held that the court should not place reliance on the decisions wi....
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....ctfully following the decision of jurisdictional High Court and the Tribunal in Assessee's own case for AY 2003-04 we see no reasons to take any other view on the matter different from the conclusions arrived at by this bench in favour of the Assessee, as far as exclusion from book profit under section 115JB is concerned, that now stands affirmed by the Hon'ble Rajasthan High Court and we are in respectful agreement with the same. 13.2 Our above view also finds support from the decision of Hon'ble Apex Court in the case of Padmaraje R. Kadambande vs. CIT .(1992) 195 ITR 877 (SC), wherein it has been held by the Apex Court that Capital Receipts are not income within the definition of Sec 2(24) of the Act and hence are not at all chargeable under the I.T. Act. A receipt which is neither 'Profit' nor 'Income' and which does not have any element there-of embedded there in, cannot be part of. 'Profit' as per Profit & Loss account prepared in terms of Part II of Schedule VI to Companies Act. 13.3 As far as the decisions relied upon by the Ld D/R are concerned, we are unable to follow the same in the present case, as the facts of the said decisions are clearly different ....
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....hrust is to find out the real working results of the company. Inclusion of receipt in the computation of MAT would defeat two fundamental principles, it would levy tax on receipt which is not in the nature of income at all and secondly it would not result in arriving at real working results of the company. The real working result can be arrived at only after excluding this receipt which has been credited to P&L a/c and not otherwise. 13.6 For better understanding of the issue, let us also extract down relevant provision of sec. 115JB as under. "Every assessee, being a company, shall for the purpose of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Part II and Part III of Schedule VI to the Companies Act, 1956 (1 of J956)." 13.7 On consideration of the above, it is apparent that for the purpose of computing book profit u/s 115JB Profit and Loss a/c shall be prepared as per Part II and III of Schedule VI to the Companies Act. Part II of Schedule VI prescribes the requirements as to Profit and Loss A/c. Clause 2{a) of Part II clearly spells that the profit and loss a/c shall be so made ou....
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....e it implies that needful adjustment to exclude the same is not only permissible, but is mandatory so as to make the Profit & Loss Account compliant, with the basic requirement of Section 115JB. 13.10 Our view per Para 13.8 above is also supported by, the decision of Mumbai Tribunal in the case of Bombay Diamond (supra) & that of Bangalore Tribunal in the case of Syndicate Bank (supra) [both analyzed in Para 12.1 above], where also Tribunal, after considering the decision of Supreme Court in the case of Apollo Tyres (supra) and explaining the same, have permitted adjustment to the Profit as per P&L Account, so as to comply with Schedule VI, Part II & Part III of the Companies Act, which is a prerequisite for section 115JB. 13.11 In the light of the aforesaid, the additional Ground filed by the Department is rejected and we hold that capital receipt in the form of Sales Tax incentive needs to be excluded from profit as per P&L Account for the year in computing Book profit u/s 115JB of the Act. This Ground of the Department is thus dismissed." 50. From the above paras, we find that the Tribunal has duly considered the judgment of the Hon'ble Apex Court rendered i....
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....r may be restored back to the file of the Ld. CIT(A) for a decision on this issue. Ld. DR of the Revenue supported the order of the Ld. CIT(A). 53. We have considered the rival submissions. We find that this issue regarding allowing of initial depreciation u/s 32(i)(ii)(a) was not raised by the assessee before Ld. CIT(A) as per the grounds of appeal raised before him as available on record as Annexure 2 to Form-35. This contention is stated to have raised by the assessee before Ld. CIT(A) also by way of additional ground. But there is no such mention in the order of Ld. CIT(A) that any additional ground was raised by the assessee before him. Apart from this, no supporting document has been produced before us to establish that any additional ground was raised by the assessee before Ld. CIT(A) which he did not decide. There is no discussion or disallowance on this account in the assessment order also. Hence, this additional ground is not arising out of the orders of the lower authorities and hence, the relevant facts are not available on record and therefore, this issue cannot be raised by the assessee before us by way of additional ground. Accordingly, additional ground is reject....
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...., this issue is decided against the assessee and Ground No.3 is also rejected. 61. In the result, appeal of the assessee is dismissed. 62. Now, we take up the appeal of the assessee for Assessment Year 2011-12 in ITA No. 518/Lkw/2015. 63. The Grounds raised by the assessee are as under:- "1. The learned' CIT (Appeals) has erred in law and on facts in confirming the disallowance out of miscellaneous expenses of Rs. 50,000/-. 2. The learned CIT (Appeals) has erred in law and on facts in confirming the disallowance out of repairs and maintenance expenses of Rs. 50,000/-. 3. The learned CIT (Appeals) has erred in law and on facts in confirming the applicability of section 115 JB of the Income Tax Act, 1961 on the facts and circumstances of the case and confirming the assessment at income of Rs. 19,75,97,090/- and imposing the Tax of Rs. 8,63,89,200/- without allowing deduction of carried forward losses and unabsorbed depreciation and without seeking that Gross Total Income is nil. As there will not be Gross Total Income, therefore section 115 JB will not be applicable.. 4. Such other relief as may crave in during the course of proceeding of ....