TaxTMI 
TaxTMI 
2016 (10) TMI 1393
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....he 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 section 115JB of the Act, for the purpose of this section, '....
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....0. 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. 1,83,67,000/- out of total addition of Rs. 2,88,96,000/- made on account of Exchange fluctuation as the repayment of loan by the assessee was capi....
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.... 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 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-....
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....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/Tax liability has been computed as under:- Particulars Assessment Year 2007-08 2008-09 Return filed on 30.03.10 A. Net Profit as per P & L A/c 480574564 417709631 B. Add: statutory Additions Provision for Current Tax Provision for Deferred Tax Provision ....
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....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 bifurcation of the foreign currency loss given by the assessee and considered by the ld. CIT(A) was not before the A.O. Therefore, the same needs to be verified by the A.O. The ld. Senior Counsel fairly conceded to this submission of the ld. D.R. 30. We find that the following bifurcation was given to the ld. CIT(A) and considered by him:- Details of Foreign currency Loss of Rs.&nb....