AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1564
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....ncome tax has erred in perfunctorily (as pointed out in detail in the annexure hereto) passing an Order u/s.263 of the Income Tax Act, 1961. 1.2 The Commissioner of Income tax failed to appreciate that the conditions precedent to passing an Order under the said section were not satisfied and hence the Order U/s.263 of the Income-tax act,1961 is ultra vires and void. 1.3 The Commissioner of Income tax has erred in holding that the Assessment Order dated 18 February 2015 passed by the Assessing Officer was erroneous and prejudicial to the interests of revenue and hence erred in passing an Order u/s.263 of the Income-tax Act in respect of the same. 1.4 The appellant submits that considering the facts and circumstances of its case and ....
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....u/s 143(3) on 18/02/2015 by Ld. Deputy Commissioner of Income Tax LTU-1, Mumbai. The income of the assessee was determined at Rs. 198.12 crores under normal provisions and Rs. 365.02 crores u/s 115JB as against returned income of Rs. 193.66 Crores & Rs. 365.02 Crores under normal provisions and u/s 115JB respectively. 2.2 Subsequently, the said assessment order was subjected to exercise of revisional jurisdiction u/s 263 by Ld. CIT vide show cause notice dated 09/11/2016 on the premises that corresponding adjustment of certain employee benefits expenses of Rs. 11.91 Crores being tax borne by the assessee on deemed perquisites on the value of accommodation provided to employees and which were not admissible u/s 40(a)(v), was omitted to be....
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....a)(v) and Ld. AO was required to add back the same to arrive at book profits u/s 115JB. The failure to do so has caused the loss of revenue and therefore, the jurisdiction u/s 263 was perfectly justified which was the only possible recourse as available to the revenue. Reliance was placed on the ratio of decision of Hon'ble Supreme Court rendered in Malabar Industrial Company Limited Vs. CIT [243 ITR 83]. 4. We have carefully heard the rival contentions and perused relevant material on record. At the outset, we note that Ld. CIT, in opening paragraph of impugned order dated 29/03/2017, has erred in noting the income particulars of the assessee. However, we are not concerned with the same under the present appeal. 5. Proceeding further....
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.... in so far as it is prejudicial to the interests of the revenue if, in the opinion of Ld. CIT the order is passed without making inquiries or verification which should have been made. 7. With this, the only question that survives for our consideration is that whether the omission to carry out the stated adjustment in the Book profits as envisaged by Ld. CIT has made the quantum order erroneous and prejudicial to the interest of the revenue and whether the stated adjustment as suggested by Ld. CIT was tenable in law or not ? In other words, we are concerned with whether the twin prime conditions viz. erroneous and prejudicial to the interest of the revenue for invoking the provisions of Section 263 was fulfilled in the instant case or not....
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....ection 115JB of the Income-tax Act provides for levy of minimum alternate tax (MAT) on the basis of book profits of a company. As per the Explanation after subsection (2), the expression "book profit" means net profit as shown in the profit and loss account prepared in accordance with the provisions of Part II and III of Schedule VI to the Companies Act, 1956, as increased or reduced by certain adjustments, as specified in that section. Clause (a) of the aforesaid Explanation, inter-alia, provides for increasing the book profits by income-tax paid or payable and the provision therefor; if debited to profit and loss account. The intention behind these add backs is that the items which mainly appear "below the line" in the profit and loss acc....
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....ssessee on non-monetary perquisites provided to employees forms part of Employee Benefit cost and akin to Fringe Benefit Tax since they are certainly not below the line items since the same are expressively disallowed u/s 40(a)(v) and the same do not constitute Income Tax for the assessee in terms of Explanation-2. This view of ours is duly fortified by the judgment of Tribunal rendered in ITO Vs. Vintage Distillers Ltd. [130 TTJ 79] where the Tribunal has taken the view that the term 'tax' was much wider term than the term 'Income Tax' since the former, as per amended definition of 'tax' as provided in Section 2(43) included not only Income Tax but also Super Tax & Fringe Benefit Tax. Therefore, without there being any corresponding amendm....