TaxTMI 
TaxTMI 
2022 (4) TMI 739
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.... Baroda has erred in law and on facts in holding that the additions of Rs. 7,09,12,384/- made to the total income under normal provisions on account of Capital Grants, Subsidies and Consumers' Contribution were also required to be made to the Book Profits computed under section 115JB of the I T Act as made in other years. The learned Commissioner of Income Tax-2, Baroda has thereby directed the Assessing Officer to make such additions to the Book Profits. 2.1 The learned Pr. Commissioner of Income Tax-2, Baroda ought to have appreciated that the additions to the Book Profits were made for the first time in the Asst. Year 2013-14. For the Asst. Years 2010- 11 and 2012-13, notices under section 148 of the Act were issued for re-opening of the assessment to make such additions. However, the Hon'ble Gujarat High Court has quashed the proceedings vide its Order dated 7-03-2018. 2.2 The learned Pr. Commissioner of Income Tax-2, Baroda further ought to have appreciated that the additions made in the Asst. Year 2013-14 and 2014-15 to the Book Profits have also been deleted by the appellate authorities. 2.3 The appellant had brought the fact to the learned....
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....sment. In this regard, it is observed that in your P&L account, you have claimed depreciation on related assets following the straight line method, but the corresponding deferred income is not credit on the same basis, but at a lower rate and this mismatch and inconsistency in accounting treatment is not in accordance with the requirement of section 115JB(2) and accounting principles. It appears that you have not prepared your statement of profit and loss in accordance with section 115JB(2), and failed to comply with the provisions of Companies Act and appropriate Accounting Standard, and failed to furnish complete information regarding the assets relating to grants, subsidies and consumers' contribution. It therefore, appears that book profits was not computed in accordance with section 115JB(2), and hence, addition to book profit u/s.115JB(2) is required to be made, as the addition was already made under regular provisions, to deferred income credited to the P&L account, on the same basis as followed by you in debiting depreciation on related assets. It therefore, appears that assessment order u/s.147/143(3) is erroneous in so far as I is prejudicial to the inte....
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....erns of the company. Hence, there is no error in the assessment order passed under section 143(3)/147 of the IT Act and the same is not prejudicial to the interest of revenue in any manner. We would therefore request your honour to kindly quash the notice issued under section 263(1) of the Act to drop the proceedings initiated under the said section at the earliest and oblige." 5. After considering the reply of the assessee, and after analyzing a large number of decisions on the issue, the ld.Pr.CIT finally concluded that order of the AO was erroneous and prejudicial to the interest of the Revenue to that extent. He set aside the reassessment order, and directed the AO to frame assessment afresh after proper enquiries/ verification. Dissatisfied with the revision order of the ld.Pr.CIT, the assessee is now before the Tribunal. 6. The assessee has also filed additional grounds of appeal as follows: "1.0 The order passed by the learned Commissioner of Income Tax (Appeals) under section 263 of the Income Tax Act, 1961 is time barred and hence, void ab initio, and be quashed." 7. The ld.counsel, Mr.M.K.Patel appearing for the assessee submitted that regular a....
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....the Asst.Year 2008-09 on 30.9.2008 declaring NIL income and claiming current year's loss of Rs. 12,85,67,801/-. Regular assessment under section 143(3) was made on 10.12.2010 reducing the loss at Rs. 5,06,04,324/- under normal provision and book profit under section 115JB was determined at Rs. 2,77,73,370/- by disallowing the additional depreciation claimed in the return of income. It is, thereafter 148-notice was issued for the excess claim of "prior period expenditure" of Rs. 16,02,98,000/-. Reassessment resulted in a taxable income of Rs. 10,96,93,680/- by order dated 30.12.2015. Now present impugned show cause notice dated 13.3.2018 was issued by Pr.CIT on the ground that book profit under section 115JB towards grants, subsidies and consumer contributions were not being properly calculated by the AO in the original assessment proceedings. No doubt the excess claim of depreciation on grants, subsidies and consumer contributions were subject matter of proceedings only in the original assessment passed under section 143(3) which is dated 30.12.2010. In the reassessment proceedings the issue is related to "prior period expenses" claimed by the assessee which was in the re-assessmen....
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....adodara relating to the Asst.Years 2013-14 in the case of Uttar Gujarat Vij Company Ltd. wherein it is held as follows: "4.2.1. The second part of Ground No. 2 pertains to addition of Rs. 39,84,10,100/- as mentioned above to the book profit u/s. 1153B. In this regard, the Ld. Authorized Representative has relied upon the decision of Hon'ble ITAT, Ahmedabad in the case of ACIT Vs. Gujarat State Energy Generation Ltd. contained in ITA No. 1777/Ahd/2009 (A.Y. 2006-07) which x had been followed by the CIT(A)-1, Vadodara in the case of Gujarat Urja Vikas Ltd. for A.Y. 2012-13 contained in Appeal No. CAB-1/290/14-15 wherein he has held that the addition made on account of capital grants cannot be made to the book profit as it is not covered by any items which are specifically mentioned in Explanation to section 115JB. Accordingly, relying upon the decision of CU(A)-1, Vadodara as also of Hon'ble jurisdictional ITAT, I hold that addition on account of contribution to the capital grants/subsidies etc. cannot be made to the book profit and hence the Assessing Officer is directed to delete the same from book profit, Thus, appellant succeeds on this account." For the Asst.....