TaxTMI 
TaxTMI 
2025 (8) TMI 448
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....08/- 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the AO's order in adding to the book profits an amount of Rs. 8,97,32,308/- being the share of loss from partnership firm. 2. The Appellant prays that that the aforesaid addition pertaining to share of loss from partnership firm to the computation of book profits u/s 115JB be deleted. GROUND NO. II: - LEVY OF INTEREST U/S 234C AND 234D OF THE ACT: 1. The CIT(A) erred in upholding the AO's order in levying interest u/s. 234C and 234D of the Act. 2. The Appellant prays that the AO to be directed to delete or appropriately reduce the Interest charged u/s. 234C and 234D of the Act. GROUND NO, III: - GENERAL: The Appellant craves leaves to add to, alter, amend and / or delete the above grounds of appeal." 2. The brief facts of the case are that the assessee's case was completed under section 143(3) accepting the returned income as well as book profit computed under section 115JB of the Act. Thereafter, by pursuing the provisions of section 263 of the Act, the Ld. Principal Commissioner of Income-tax, Ujjain set aside the i....
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....ship firm is exempt from tax as per Chapter III under section 10(2)(a) of the Act. We find that the provisions of Chapter XII-B of the Act is a special provision relating to assessment of certain companies whether the income of certain companies chargeable to tax for the relevant previous year shall be deemed to be an amount equal to 30 per cent of such book profit. These, being special provisions applicable to certain companies have to be strictly applied and income of the assessee has to be computed in accordance with "Book Profit" of the assessed and the working of the "book profit" has to be made as per the provisions of Chapter XII-B of the Act. The proposition that the word "income" includes "loss" is not applicable while computing the "book profit" in accordance with the provision of Chapter XII-B of the Act. We find that the provision of sub-clause (1) to Explanation to section 115JA of the Act relates to the amounts of "Expenditure" relatable to any income to which any of the provisions of Chapter III applies and therefore, the "Loss Share" from a registered firm cannot be said to be synonymous to the word expenditure mentioned in the relevant sub-clause( f) to Explanation....
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....) Apollo Tyers Ltd v. CIT (2002) 255 ITR 273 (SC) (ii) GTN Textiles Lad a case (pa) (iii) Govind Rubber(P) Licant(mpa) (iv) Starchik Specialtier Lady cane (s) (v) Smruthi Organics Lada (pa) (vi) Tushako Pump Ltd v. Asst. CIT (2005) 2 S0T 556 (Bom), and (vii) Asst. CIT vs. Varinder Agro Chemicals Ltd. [2007] 161 Taxman 134 (Chd.)(Mag.) 14. In view of the above submission, we find no merit in this ground of the department and the same is dismissed. 15. In the result, the appeal filed by the revenue is dismissed." 5. The Ld. DR argued and relied on the order of the revenue authorities. The Ld.DR invited our attention in paragraph 8 of the impugned appellate order, which is extracted below:- "8. In Ground No. 2, the appellant has contested the addition made on account of share of loss from partnership firm amounting to Rs. 8,97,32,308/-. 8.1. I have considered the appellant's submissions, the arguments raised, and the materials on record, including the orders of the AO, the revision order u/s 263 of the Act, and the judicial precedents cited by the appellant. 8.2. The appellant has....
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....ome of the firm. Share of loss in a firm is not an expenditure relatable to any exempt income and application of clause-1 of the Explanation was, in our opinion, incorrect. It was Clause (ii) of the Explanation which was applicable. Share of loss in our opinion is nothing but share of negative income. Explanation (ii) to Section 115JB mandates reduction of income to which Section 10 applies, if such income is credited in the Profit & Loss A/c. When share of income from firm is exempt u/s. 10(2A) of the Act, necessarily share of loss is also exempt. What the AO did by adding the loss from the two firms to the profits was reducing, the negative Profit, since loss is nothing but negative profit. We are of the opinion what the Id. AO did was in accordance with Clause(ii) of the Explanation and that the Id. CIT (A) fell in error in relying on a wrong clause for giving relief to the assessee. Accordingly, we set aside the order of the Id. CIT (A) and reinstate the addition made by the AO" 8.5. In view of the above discussion, the AO's action in re-computing the book profit by taking into account the share of loss in partnership firm is upheld. Accordingly. Ground No. 2 stand....