The Commissioner Of Income Tax-V v. Khosla Metal Powders Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.1044 OF 2008 The Commissioner of Income Tax-V: Appellant v/s Khosla Metal Powders Pvt. Ltd. : Respondent Mr. Vimal Gupta for AppellantMr. S.N. Inamdar for Respondent Coram : Dr. S. RadhakrishnanS.J. Kathawalla, JJ.Date : 8.9.2008 P.C..Heard the learned counsel for the appellantand the learned counsel for the respondent. Thefollowing question of law is sought to be raised. On the facts and in the circumstances of thecase, whether the Hon’ble ITAT is right indeleting the adjustment made in thecomputation of book profit u/s. 115JB by theAO when the assessee has not even disclosedthe book liability in the books of accounts asper the Companies Act. .We have perused the order of the Income TaxAppellate Tribunal dt. 31.7.2007 wherein in paragraph 5 the Tribunal has categorically held as under:- Having heard the rival contentions and havingperused the material on record, we find that,as rightly held by the CIT(A), the impugnedadjustment to the book results shown by theduly audited profit and loss account cannothold good in law in the light of Hon’bleSupreme Court’s judgment in the case of ApolloTyres Limited vs CIT(255 ITR 273). As TheirLordships have held that the AssessingOfficer’s has "only the power to examiningwhether the books of accounts are certified bythe authorities under the Companies Act ashaving been properly maintained in accordancewith the Companies Act" and that "theAssessing Officer thereafter has the limitedpower of making increase and reductions asprovided for in the Explanation to the saidSection". The Assessing Officer has, however,observed that "the Court’s decision isapplicable only when the books of accounts ascertified by the authorities under theCompanies Act have been properly maintained".This stand of the Assessing Officer is clearlyerroneous inasmuch he is only to see whetherthe books of accounts are "certified by theauthorities under the Companies Act as havingbeen properly maintained in accordance withthe Companies Act"and it is not for him toventure to examine whether or not these areproperly maintained. The distinction soughtto have been made by the Assessing Officer ismisplaced and cannot but be based onmisreading the Hon’ble Supreme Court’sjudgment. The CIT(A) has rightly reversed theaction of the Assessing Officer. We confirmand approve the action of the CIT(A), and thusdecline to interfere in the matter.The Tribunal has concurred with the findingsfact of the CIT(A). It is only a finding of fact. . of There is no substantial question of law, hence the Appeal stands dismissed. (S.J. Kathawalla,J.) (Dr. S.Radhakrishnan,J.)