TaxTMI 
TaxTMI 
2019 (11) TMI 203
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.... ii) Disallowing provision for Reversal of provision for diminution in value of of investment(writtenback) 10,442,237 (cr) Consequently computing the Book Profit at Rs. 32,20,96,314/-. c) Not determining the amount of MAT credit available to the assessee company for the assessment year to be adjusted against future normal tax liability. 2) Whether under the facts and circumstances of the case and in law the learned CIT(A) was justified in confirming the action of the AO in considering the Foreign Exchange Fluctuation- Capital Nature (Credit) Rs. 43,82,892/-, chargeable to tax as Business Income. 3) Whether in view of the facts and under the circumstances of the case, the CIT(A) was justified in law in upholding the action of AO in charging of interest of Rs. 29,16,943/- u/s 234B of the Act; on the amount of tax on book profit of Rs. 32,20,96,314/- recomputed on the basis of retrospective amendment in sec. 115JB of the Act inserted by Finance Act (No.2), 2009. 4) The appellant craves to be allowed to add any fresh/additional grounds of appeal and/or withdraw any of the grounds of appeal either before or at the time of hearing of appeal." 3. The assessee being a....
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....he Assessing Officer allowed these claims. Further the Ld. AR while referring to section 10A(4) submitted that the said section provides formula for computing deduction, CIT(A) observed that though "export turnover - the numerator", in the formula has been defined in section 10A, however, "total turnover - the denominator" has not been defined. The Ld. AR submitted that since export turnover specifically excludes freight, telecomm and insurance, therefore, different meaning cannot be assigned to total turnover. The Ld. AR relied upon the decision in case of CIT v. Lakshmi Machine Works [2007] 290 ITR 667 (SC). The Ld. AR submitted that neither the Assessing Officer nor CIT(A) has given any adverse finding on the submissions made. There is no finding that ISP charges were for delivery of computer software and the travelling expenses were for providing technical services outside India. The Ld. AR submitted that the issue is no more resintegra and is covered by the decision of the Hon'ble Supreme Court in case of CIT v. HCL Technologies Ltd. (2018) 404 ITR 719 (SC). The Assessing Officer on estimate basis had excluded 60% of software development charges from export turnover as expendi....
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....there is mistake in figures pertaining to one undertaking. The Ld. AR submitted that by revised return filed on 22.09.2009, deduction u/s 10A of Rs. 25,61,48,875/- was claimed. Deduction u/s 10A was claimed in respect of four undertaking. Against the claim of deduction of Rs. 25,61,48,875/-, the Assessing Officer allowed deduction of Rs. 23,95,42,286/- (difference of Rs. 1,66,06,589) as under: * Profit of the business was taken at Rs. 23,22,45,490/- * Export turnover and total turnover was reduced by Rs. 3,08,53,780/- and Rs. 7,80,68,057/- on account of telecommunication expenses and travel expenses. * Though deduction of Rs. 23,95,42,286/- was allowed in the respect of four undertakings having profit, however, by mistake only the figures pertaining to Noida IT were noted. Thus, these aspects needs to be verified and should be put before the Assessing Officer for fresh adjudication. It will be appropriate to remand back this issue to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground No. 1(a) is partly allowed for statistical purpose. 8. As regards Ground Nos. 1(b) and 1....
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....d. v. CIT12011/ 330 ITR 363 (SC) upheld the adjustment holding that in the year in which provisions were created, the same were not added back for the purposes of MAT computation in the return originally filed. Only by the revised computation, provisions were added back. Therefore, book profit for AY 2007-08 has not been increased by the provision of Rs. 1,04,42,237/- & Rs. 1,82,43,319/-. The Ld. AR submitted that the reason that revised computation was filed subsequently is of no significance. Return for AY 2007-08 was filed on 30.10.2007 i.e. much before the amendment by Finance (No.2) Act, 2009 (It was notified on 19.8.2009). Impossibility of compliance due to subsequent retrospective amendment could not be the basis for adverse finding. Assessment for AY 2007-08 was made u/s 143(3) vide order dated 16.12.2010 i.e. after the revised computation of income u/s 115JB was filed for AY 2008-09. Since it is not in dispute that tax liability for AY 2007- 08 under normal computational provision was more than the tax liability u/s 115JB, therefore, it can be said that provisions for Rs. 1,04,42,237/- and Rs. 1,82,43,319/- were added back to compute book profit for AY 2007-08. Reliance ....
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....y the amount of provision of Rs. 1,04,42,237/- 8s Rs. 1,82,43,319/- therefore, CIT(A) was not justified in upholding the adjustment. Merely because for AY 2007-08, total income under regular provisions was more than the book profit u/s 115JB, it cannot be said that book profit for AY 2007-08 was not increased by the amount of provisions. Upholding the order of CIT(A) would lead to absurdity. Had total income for AY 2007-08 been assessed u/s 115JB, then book profit of Rs. 11,75,52,668/- been the total income and tax would have been Rs. 1,31,89,409/-, whereas, tax of Rs. 1,67,09,898/- was paid under normal computational provisions 9. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 10. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that in the present case, net profit for the year ended on 31.3.2007 was increased by the amount of provision of Rs. 1,04,42,237/- and Rs. 1,82,43,319/- therefore, CIT(A) was not justified in upholding the adjustment. Merely because for AY 2007-08, total income under regular provisions was more than the book profit u/s 115JB, it cannot be said that book profit for....
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....al field being investment in subsidiaries, therefore, such gain was capital in nature. These submissions were not taken into account by the Assessing Officer as well as by the CIT(A). Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground No. 2 is partly allowed for statistical purpose. 14. As regards ground no. 3 relating to charging of interest of Rs. 29,16,943/- u/s 234B of tax computed u/s 115JB. The Ld. AR submitted that pursuant to amendment of section 115JB by the Finance (No.2) Act 2009 with retrospective effect of 1.4.2001, the assessee filed revised computation of book profit and thereby, provision for bad debts of Rs. 1,68,37,339/- and provisions for doubtful advances of Rs. 3,67,86,988/- was added to the book profit. It led to shortfall in advance tax. The legal position is settled that in such cases, interest u/s 234B cannot be charged. The Ld. AR relied upon the following decisions: (i) Emami Ltd. v. CIT [2011] 337 ITR 470 (Cal) (ii) CIT vs. Jupiter Bio Science Ltd. [2013] 352 ITR 113 (Karn) (iii) CIT....