TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 860
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.... the revenue. 2. The Ld. CIT erred in ignoring all the relevant facts and legal precedents cited by the appellant in support of its claim that in the facts and circumstances prevailing in the case of the appellant, no action under section 263, was called for because the two view are possible and the Ld. AO had adopted the view in favour of assessee. 3. The appellant craves leave to add, alter, amend, modify or delete any of the aforesaid grounds of appeal. 3. Rival contentions have been heard and record perused. 4. In this case, CIT invoked powers u/s.263 and directed the AO not to allow deduction u/s. 80IB(10) while computing book profit u/s.115JB of the IT Act. CIT has taken a view that assessee had incorrectly reduced deduction ....
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.... from the book profit. However, after placing reliance on judgement of Hon'ble Karnataka High Court and on decision of Hon'ble Ahmedabad Tribunal, the Ld. CIT has noted that while computing book profit for MAT u/s. 115JB of the Act, the assessee had incorrectly reduced deduction under section 80IB which was accepted during the scrutiny assessment for the year, under normal provisions. Thereafter, vide order dated 30.03.2016 the Ld. CIT set aside the order of the Ld. AO and directed him to pass a fresh order after considering the ratio mentioned in her order. 9. So far as reduction of profit eligible for deduction u/s.80IB is concerned while computing book profit u/s.115JB, there are the two views possible. As per settled judicial p....
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.... provisions of the Act. Thus, it will not be taxable u/s 115JB. 14. Sec.80IB(10) and 115JB have presence of a non-obstante clause. Therefore, the non-obstante clause as incorporated in Sec.80-IB should prevail, as it is in consonance with the intention of the legislature in granting exemption in respect of the income earned by the assessee from housing project. Reliance is placed on the following judicial pronouncements. i. CENTRAL BANK OF INDIA vs STATE OF KERALA [(2009) 21 VST 505 (SC), ii. ii. MADHAV RAO JIVAJI RAO SCINDIA vs. UNION OF INDIA (1971)1 SCC 85) 15. Sub-section (5) which says that save as otherwise provided in this section. Similar provision was incorporated in sub sec (4) of sec 115JA which is the predecessor of sec ....
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....e company had legitimate expectation to enjoy the benefit of exemption and even a legitimate expectation being in the nature of an assurance in law if it flows out of the statutory provisions, that cannot be denied to the assessee company. Reliance is placed on the following judicial pronouncements. I) MRF LTD VS. Asst. CST (2006) 148 STC 225 (SC) II) Bannari Amman Sugars Ltd., vs. CIT (2005) 1 SCC 625 III) M P Oil Extraction vs. State of MP (1997) 7 SCC 592 17. The receipts which are not taxable cannot bring to tax under any other section."CIT vs. D.P.Sandhu Brothers 273 ITR 1 (SC) 18. In the newly inserted sec. 115JC the legislature clearly mention that "deduction claimed, if any, under the heading "C.-Deductions in respect of ....
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....liable to pay the MAT on the profit earned u/s.80IB(10). In terms of the decision of Supreme Court in case of Max India (supra) whenever two views are possible and the AO has taken one view, with which the CIT does not agree, it cannot be treated as an erroneous order, prejudicial to the interests of the Revenue. 21. ITAT Mumbai Bench in case of Frigsales (India) Ltd., SOT 376 held that a receipt which is not in the nature of income cannot be taxed as income u/s.115JA. The head notes of the case reads as under:- "Section 115JA, read with section 50, of the Income-tax Act, 1961 -Minimum alternate tax - Assessment year 1998-99 - Whether a receipt, which is not in nature of income, can be taxed as income under section 115JA - Held, no - Whe....
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.... Act cannot be treated as part of book profit u/s.115JB, hence, the ld. AO has adopted one of the possible view. Thus, Income arising from development of housing projects are not taxable (Sec 80IB(10) and were excluded from its purview. Therefore, Sec. 80IB(10) income will not be part of MAT income and MAT tax. Thus, the assessment order was rightly passed and cannot be termed as erroneous & prejudicial to interest of revenue. 25. In our considered view, provision of section 263 will apply when decision of AO is erroneous as well as prejudicial to the interests of the Revenue. But in a case where two views are possible and the AO has taken one view, with which the CIT does not agree, it cannot be treated as an erroneous order, prejudicial ....