Itxa/1419/2012 Of The Commissioner Of Income Tax 2 v. M/S.tata Autocomp Systems Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1419 OF 2012 The Commissioner of Income Tax-2..Appellant-Versus-M/s. Tata Autocomp Systems Ltd...Respondent ..Respondent ........... Mr. Suresh Kumar for the Appellant.Mr. P. J. Pardiwalla, Senior Advocate, i/b. Atul K. Jasani for the Respondent. ........... CORAM: S.C. DHARMADHIKARI AND A.A. SAYED, JJ. DATE :- 27[th] NOVEMBER, 2014 P.C.: This Appeal of the Revenue challenges the order passed by the Income Tax Appellate Tribunal dated 6[th] June, 2012. 2]The return of income was filed on 31[st] October, 2005 by the Assessee declaring total income Nil. Against the business income of Rs.10,45,25,805/- the Assessee adjusted the brought forward unabsorbed business loss set off and claimed the unabsorbed depreciation and business loss of Rs.23,41,97,158/- to be carried forward. The Assessee has computed the tax liability of Rs.1,10,53,572/- on the book profit of Rs.16,06,31,999/- under section 115JB of the Act. The return was 1/4 processed under section 143(1) on 6[th] June, 2006. It is not disputed that the return was accompanied by the audited Balance Sheet, Profit and Loss Account and Tax Audit Report. The Assessee revised its return on 31[st ]March, 2007 declaring total income at Nil. The Assessee has against business income of Rs.24,26,48,867/- adjusted the brought forward unabsorbed business loss set off and claimed the unabsorbed depreciation and business loss of Rs.9,57,90,182/-. 3]At the same time, the Assessee has computed the tax liability of Rs.1,40,23,227/- on the book profit of Rs.19,85,04,216/- under the 115JB of the Act. In the original return of income, the Assessee has made the claim under section 10A and under section 10B both in the normal computation of income as well as computation under section 115JB but with a note that these deductions were computed on estimated basis. In the revised return, in the normal computation the Assessee has not claimed any such deduction. However, in the computation under section 115JB, the Assessee has claimed deduction under section 10B of the Act. That is how the case was selected for scrutiny and the further proceedings commenced after which the order of assessment was passed on 28[th ]December, 2007. Aggrieved thereby, the matter was carried in Appeal to the Commissioner and the Commissioner has found that the definition of book profit as set out in explanation 1 to section 115JB at the relevant 5.itxa1419.12.doc time was that book profit means “net profit” as shown in the Profit and Loss Account for the relevant previous year prepared under sub-section (2) and as increased by the amount of income to which any of the provisions of section 10 (other than the provisions contained in clause (23G) thereof) or section 10A or section 10B or section 11 of section 12 apply if any such amount is credited to the Profit and Loss Account. 5.itxa1419.12.doc time was that book profit means “net profit” as shown in the Profit and Loss Account for the relevant previous year prepared under sub-section (2) and as increased by the amount of income to which any of the provisions of section 10 (other than the provisions contained in clause (23G) thereof) or section 10A or section 10B or section 11 of section 12 apply if any such amount is credited to the Profit and Loss Account. 4]Therefore, the Commissioner held that the Act does not require that the income should form part of computation of income but it must be credited to the Profit and Loss Account. The Assessee has credited the entire income to Profit and Loss Account. Hence, amount was reduced from book profit for the purposes of section 115JB of the Income Tax Act. This order of the Commissioner in favour of the Assessee was challenged by the Revenue before the Tribunal and the Tribunal found that the issue is for the assessment year 2005-06. The Assessee made a computation and for the purposes of section 115JB relying on the explanation 1 as it stood then. The facts being undisputed, the Tribunal held that the Commissioner did not commit any error apparent on the face of the record nor his order can be termed as perverse. The only ground on which the Assessing Officer refused to accept the claim or deduction was that the Assessee had not lodged it in its normal computation. So long as the definition of the term book profit and found in explanation 1 wadhwa permitted the Assessee to lodge that claim, the Tribunal held that it is not necessary for him to have shown it in the normal computation. In the original return of income and the normal computation, this was not shown but in the revised return this was the claim lodged and referred by relying upon the explanation. It was also claimed on the basis that amount is credited to the Profit and Loss Account. It is in such circumstances and relying on the explanation 1 as it stood then that the Tribunal upheld the order of the Commissioner. The view taken in the facts and circumstances peculiar to the Assessee cannot be termed as perverse or proceeding on a complete misreading or mis-interpretation of the relevant statutory provision. In such circumstances, the Appeal does not raise any substantial question of law. It is, accordingly, dismissed. No order as to costs. (A. A. SAYED, J.) (S.C. DHARMADHIKARI, J.)