TaxTMI 
TaxTMI 
2016 (5) TMI 624
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.... The unjustified and uncalled for action is untenable under the law, as such urged and liable to be cancelled. 2) In view of the facts and under the circumstances, the assessee company denied to be assessed u/s 1471143(3) of the Act; after lapse of more than four years, merely on change of opinion after completion of regular assessment u/s 143(3) of the Act on the strength of revenue audit objection pointing out the mistake of law and in the absence of any fresh material held on record. The unlawful and unjustified action of the AO is urged and liable to be set aside/cancelled. 3) Under the circumstances, the learned AO grossly erred in law and on facts in calculating the book profit u/s 115JB of the Act; at Rs. 2,28,70,485/- with her own presumption and assumptive view as under:- (a) by adding loss under the normal provisions of the Act as loss u/s 10B of the Act Rs. 56,47,764/- (b) by not adding expenses relating to Income to which provision of Sec.10B of the Act; apply as per Expln.[ 1 ](t) - Total Exp. As per P&L A/c Export Sales -44,79,02,204 X 42,87,60,787 =Rs.41,41,22,550/- Total Sales 46,37,34,471 (c....
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....ome/expenditure relating to any income to which section 10B applies has not been adjusted in the book profit of the assessee, who has shown a loss of Rs. 56,47,764/- on account of business eligible for claim of deduction u/s 10B of the Act and the same is liable to be added while computing the book profit of the assessee company. Consequently, the AO made an addition of Rs. 2,28,70,485/- on account of book profit u/s 115JB of the Act. 4. Assessee carried the matter before the ld. CIT (A) who has partly allowed the appeal vide impugned order. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 6. The ld. AR for the assessee challenging the impugned order contended inter alia that there has not been any failure on the part of the assessee to disclose the full and true material facts at the time of filing the return on account of omission to compute book profit at Rs. 1,36,64,830/-; that the AO has erre....
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....the provisions contained under clause (i) of Explanation 1 of section 115JB of the Act while calculating the book profit. Secondly, the AO noticed that the assessee has shown a loss of Rs. 56,47,764/- on account of business eligible for claim of deduction u/s 10B of the Act and held that the same is not to be adjusted in the book profit of the assessee. Thirdly, the AO noticed that as per profit & loss account, assessee has debited Rs. 37,57,891/- as provision for doubtful debts and advances but the AO held that the same being unascertained liability is to be added back while computing the book profit and proceeded to compute the book profit of the assessee under amended provisions of section 115JB as under :- "Net Profit (as per P&L A/c) Rs. 5,77,346/- Add 1) Provision for Income Tax Rs. 2,50,000/- 2) Provision for Wealth Tax Rs. 14,398/- 3) Provision for diminution in Value of assets ( Para 3.2) Rs.1,67,74,508/- 4) Loss u/s 10B of IT Act (para 3.3) Rs. 56,47,764/- 5) Provision for doubtful debts and advances Rs. 37,57,891/- Less : 1) Provision for Income Tax Written Rs. 17,45,233/- 2) Provision for deferred tax (asse....
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....of Dil Ltd. (supra) held as under :- "Section 115JB, read with section 147, of the Income-tax Act, 1961 - Minimum alternate tax - Non-disclosure of primary facts - Assessment year 2004-05 - For assessment year 2004-05, Assessing Officer completed assessment of assessee on 30-8-2006 and computed book profit under section 115JB at a certain amount - Subsequently, Assessing Officer reopened said assessment on 8- 3-2011 - Reasons for reopening assessment were to effect that while computing book profit (i) amount set aside as provision for diminution in value of investment, (ii) amounts set aside to provisions made for meeting gratuity and superannuation liabilities, and (iii) amount of business development expenditure, had not been added back to book profit - Whether since reasons recorded by Assessing Officer, in fact, merely indicated a reason to believe that income of assessee had escaped assessment and there was no reference whatsoever to formation of an opinion that there was a failure on part of assessee to fully and truly disclose all material facts necessary for assessment, reopening of assessment beyond period of four years was contrary to law - Held, yes [In favour o....
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....here at all - Accordingly, reassessment proceedings were set aside - Whether, on facts, Tribunal had rightly concluded that proviso to section 147 could not be invoked merely because there was an amendment in future which was introduced retrospectively and covered period in question - Held, yes - Whether, therefore, impugned order of Tribunal was to be confirmed - Held, yes" 18. So, by applying the law laid down by the Hon'ble High Court in judgments, Dil Ltd. vs. ACIT and CIT vs. Sil Investments Ltd. (supra) discussed in the preceding paras, we are of the considered opinion that assessment cannot be reopened after expiry of four years on the basis of retrospective amendment from the end of the assessment year. 19. Now, the next question arises for determination is, "as to whether AO can reopen the assessment on the basis of mere change of opinion"? 20. As we have already discussed in the preceding paras that the assessment of the assessee was duly accepted by the AO u/s 143(3) and again after expiry of four years, assumed jurisdiction to reopen the assessment under amended provisions contained u/s 115JB which is not permissible under law. Identical issue has been decided ....