TaxTMI 
TaxTMI 
2016 (10) TMI 1393
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....013 & C.O. 36/Ahd/2014 for A.Y. 2006-07 3. The sum and substance of the grievance of the revenue is that the ld. CIT(A) erred in annulling the assessment order made u/s. 147 r.w.s. 143(3) of the Act vide order dated 25.10.2012. 4. Briefly stated the facts of the case are that the original assessment was made u/s. 143(3) of the Act vide order dated 26.12.2008. The completed assessment was reopened by a notice issued u/s. 148 dated 23.03.2012. The date of notice clearly shows that the completed assessment has been reopened beyond the period of 4 years from the end of the relevant assessment year. 5. The reasons recorded by the Assessing Officer for reopening the assessment reads as under:- " The assessee is engaged in the business of manufacturing and trading of paper. The assessee filed its revised return of income on 22. 09. 2007 declaring NIL income after set off of unabsorbed depreciation of Rs 16,52,47,1307- and paid tax u/s 115 JB. The case was finalized u/s 143 (3) of the I T Act deciding total assessed income of Rs NIL after making addition of Rs 9,16,87,6207- and enhancing book profit by Rs 4,75,46,243/-for the purpose of MAT. As per explanation below secti....
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....efore, it cannot be said full facts related to this issue were not disclosed before the A.O. at the time of original assessment. 10. Considering the above facts and totality, we find that there was no failure on the part of the assessee to disclose truly and fully all the material facts before the Assessing Officer at the time of original assessment proceedings. 11. In the light of the proviso to Section 147 of the Act, we do not find any error or infirmity in the findings of the ld. CIT(A). Appeal filed by the Revenue is accordingly dismissed. 12. The learned Senior Counsel did not press the Cross Objection of the Assessee; therefore the same is dismissed as not pressed. ITA No. 2156/Ahd/2013 & C.O. No. 37/Ahd/2014 for A.Y. 2008-09. 13. The substantive grievance of the revenue reads as under:- 1. On the facts and circumstances of the case, whether the Ld CIT(A) is justified in deleting the addition of Rs. 6,13,84,689/- made on account of adjustment of MAT credit entitlement while computing book profit u/s. 115JB? 2. On the facts and circumstances of the case, whether the Ld CIT(A) is justified in deleting the addition of Rs.&nbs....
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.... therefore...... Since the MAT credit is of same nature as on income tax, the adjustment of the same is also required while computing book profit u/s 115 JB. 2. Further without prejudice to above contentions, we submit that the spirit of section 115 JB of the Act is to bring all the adjustments under tax net which are in the nature of appropriation of profit as per Schedule-VI. In this regard, we refer Circular No. 1/2009 dated 27. 03.2009 issued by CBDT wherein it gives explanatory note to the provisions of Finance Act, 2008 In paragraph No. 22 to 22. 4 of aforesaid circular, the CBDT has clarified the intention of the law relating to adjustments u/s 1115 JB as under :- Clarification on add back of ' deferred tax ' dividend distribution tax', etc for calculating book profit under section 115JB. Section 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 sub-section(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....
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.... is allowed in favour of the appellant. 20. Aggrieved by this, the revenue is before us. The ld. D.R. placed strong reliance on the assessment order. It is the say of the ld D.R. that MAT is not part of deferred tax. Per contra, the learned Senior Counsel reiterated what has been stated before the lower authorities. 21. We have given a thoughtful consideration to the orders of the authorities below. Let us first examine how the assessee has shown profit before tax in its Profit and Loss account for the year ended 31.03.2008, the same reads as under:- PROFIT BEFORE DEPRECIATION & TAX 10,578.03 12,250.44 Depreciation 18 5,883.56 4,961.29 PROFIT BEFORE TAX 4,694.47 7,289.15 Provision for Current Tax 741.02 550.80 Provision for fringe Benefit Tax 135.55 105.00 MAT Credit Entitlement (613.85) (550.80) PROFIT BEFORE DEFERRED TAX 4,431.75 7,184.15 Provision for Deferred Tax 254.71 2,378.38 PROFIT AFTER TAX 4,177.04 4,805.77 Debenture Redemption Reserve Written Back 209.54 484.58 Surplus brought forward 9,358.02 5,165.79 13,744.60 10,456.14 22. The book profit for MAT....
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....allowability of the same. In its reply vide letter dated 07.09.2012, the assessee placed strong reliance on the judgment of the Hon'ble Supreme Court in the case of Woodward Governor India Pvt. Ltd. 312 ITR 254. 26. The contention of the assessee did not find any favour with the A.O. who was of the strong belief that the judgment of the Hon'ble Supreme Court (supra) is clearly distinguishable on facts. The A.O. observed that the Hon'ble Supreme Court has held that repayment of Foreign Exchange Fluctuation is allowable only if it is not capital in nature. But in the instant case, the repayment of loan is capital in nature and hence not allowable. The A.O. accordingly made an addition of Rs. 2,88,96,000/-. 27. Assessee carried the matter before the ld. CIT(A) and reiterated its claim as made during the course of the assessment proceedings. After considering the facts, the ld. CIT(A) was convinced that out of Rs. 288.96 lacs, Rs. 183.67 lacs is on account of revenue and, therefore, directed the A.O. to delete the addition to the extent of Rs. 183.67 lacs. 28. Aggrieved by this, the revenue is before us. 29. The ld. D.R. strongly stated that the bifurcat....