TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1609
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.... of the Revenue. 3. Briefly stated the facts of the case are that the assessment was made u/s. 143(3) of the Act vide order dated 24.12.2012 in the case of the assessee-company which is engaged in the business of dealing in shares and securities under the Portfolio Management Scheme. While framing the assessment order u/s. 143(3) of the Act, the Assessing Officer observed that 15% of Book Profit is less than the tax payable on the income assessed under the normal provision of the Act, provisions of Sec. 115JB of the Act was not apply. Hence, for the purpose of taxation, total income shall be taken as per the normal provisions of the Act. 3.1. This order did not find favour with the Principal CIT who vide notice u/s. 263 of the Act dated 2....
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.... 12.75 crores paid/payable to M/s. Shantilal Shanghvi Foundation . Out of Rs. 12.75 crores, the assessee could pay only Rs. 10.25 crores on or before 31st March, 2010 and Rs. 2.50 crores is shown as liability under Schedule-J of the balance sheet. 3.3. This is the bone of contention between the Principal CIT and the assessee. The Principal CIT is of the firm belief that the assessee has claimed the amount which has not been paid by it and therefore the Book Profit u/s. 115JB of the Act has not been computed properly resulting in an assessment order not only erroneous but also prejudicial to the interest of the Revenue. Accordingly, Principal CIT set aside the assessment order with a direction to complete the same afresh after giving a reas....
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....the case of M/s. Forever Diamonds Pvt. Ltd in Income Tax Appeal No. 1609 of 2013. It is the say of the Ld. Counsel that the ratio laid down by the Hon'ble Supreme Court and followed by the Hon'ble Jurisdictional High Court (supra) squarely apply on the fcts of the case and therefore the order of the Principle CIT deserves to be set aside. 6. Per contra, the Ld. Departmental Representative strongly supported the order of the Principal CIT. It is the say of the Ld. DR that the CIT has validly and lawfully invoked the powers vested upon him u/s. 263 of the Act and therefore the order should be upheld. The ld. DR relied upon the decision of the Hon'ble Madras High Court in the case of Indian Textiles 157 ITR 1212 and Hon'ble Calcutta High Cour....
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.... when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous" 9. Now, let us see in the light of the above ratio whether the assessment has been made on an incorrect assumption of facts or an incorrect application of law. The first observation of the Principal CIT is that the full donation cannot be debited on payable basis and therefore the Book Profit u/s. 115JB has not been prepared as per the provisions of Part-II Schedule-VI of Companies Act 1956. We do not find any force in this observation of the Principal CIT. The Hon'ble Supreme Court in the case of Apollo Tyres (supra) has made the following observatio....
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....above contention is misplaced. Sub-section (1A) of section 115J does not empower the Assessing Officer to embark upon a fresh inquiry in regard to the entries made in the books of account of the company." 10. The Hon'ble Suprem Court further observed as under: "Beyond that, we do not think that the said sub-section empowers the authority under the Income-tax Act to probe into the accounts accepted by the authorities under the Companies Act. If the statute mandates that income prepared in accordance with the Companies Act shall be deemed income for the purpose of section 115J of the Act, then it should be that income which is acceptable to the authorities under the Companies Act. and finally the Hon'ble Supreme Court laid down the ratio....