Premium Granites Limited, Bangalore V. ITO, CHENNAI

ITA 1037/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64628 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-12-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 10-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T BANUSEKAR
• Keywords: Benefit of exemption; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO. 1037/MDS/2012 ASSESSMENT YEAR : 2000-01 M/S. PREMIUM GRANITES LTD., NO.6, I MAIN, I BLOCK, KORAMANGALA, BANGALORE-560 034. V. THE INCOME TAX OFFICER, COMPANY CIRCLE-V(2), CHENNAI. (PAN : AAACP3498C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T. BANUSEKAR. CA RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL.CIT DATE OF HEARING : 03.1 2.2012 DATE OF PRONOUNCEMENT : 06.12.201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS)-V, CHENNAI DATED 27-02-2012 FOR TH E ASSESSMENT YEAR 2000-01. ITA NO.1037/MDS /2012 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A LIMITE D COMPANY ENGAGED IN THE MANUFACTURE OF GRANITE TILES, MONUME NTS, SLABS AND BLOCKS. THE ASSESSEE COMPANY HAD FILED A RETUR N OF INCOME FOR THE ASSESSMENT YEAR 2000-01 ADMITTING TOTAL INC OME OF ` 1,81,88,224/- BEFORE CLAIMING BROUGHT FORWARD LOSSE S. AFTER CLAIMING BROUGHT FORWARD LOSSES THE ASSESSEE COMPAN Y HAD SHOWN NIL INCOME. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (' THE ACT' FOR SHORT) AND ACCEPTED THE RETURN OF INCOME AS NIL. S UBSEQUENTLY, AFTER FOLLOWING THE DUE PROCEDURE, THE ASSESSMENT W AS RE- OPENED BY ISSUING NOTICE U/S 148 OF THE ACT ON THE GROUND THAT THE ASSESSEE COMPANY HAS NOT ADMITTED ANY INCOME AS PER SECTION 115JA OF THE ACT. HAD IT BEEN CONSIDERED T HE BOOK PROFIT FOR THE ASSESSMENT YEAR 2000-01 WOULD COME TO ` 19,02,251/- AND RESULTED IN A TAX DEMAND OF ` 13,53,307/- WHICH WAS WORKED OUT AS PER THE P & L ACCOUNT PREPARED BY THE ASSESS EE IN ACCORDANCE WITH THE PROVISION OF PART II AND PART I II OF SCHEDULE VI OF THE COMPANIES ACT, 1956. BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS RELIED ON CERTAIN CASE LAWS. THE ASSE SSING OFFICER AFTER CONSIDERING THE CASE LAWS RELIED ON BY THE AS SESSEE OBSERVED THAT ONCE THE INCOME WAS ASSESSABLE UNDER SECTION ITA NO.1037/MDS /2012 3 115JA RECOURSE CANNOT BE HAD TO THE OTHER PROVISION S OF THE ACT. ANY ALTERATION TO THE BOOK PROFIT CAN BE CARRIED OU T ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 115JA OF THE ACT. BY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF APOLLO TYRES V. CIT (255 ITR 273)(SC) THE ASSESS MENT WAS COMPLETED. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(APPEALS). THE LEARNED CIT(APPEALS) AFTER C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER, REMAND REPORT, WRITTEN SUBMISSIONS FILED AND THE ARGUMENTS OF THE AR OF THE APPELLANT. AFTER CONSIDERING THE SAME, THE ISSUE IN APPEAL IS DECIDE D AS UNDER. 4.1 THE ONLY ISSUE INVOLVED IN THIS APPEAL IS MADE NOT TO THE COMPUTATION OF TAXABLE INCOME UNDER SECTION 115JA OF THE ACT. THE FACTS OF THE CASE, I N BRIEF, ARE THAT THE APPELLANT COMPANY FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 200-2001 ADMITTING INCOME OF ` 1,81,88,224/- AND AFTER CLAIMING THE FORWARD LOSSES, THE APPELLANT HAD SHOWN NIL INCOME. THE CASE WAS PROCESSED UNDER SECTION 143(1). HOWEVER, THE AO FOUND THAT THE APPELLANT HAD NOT ADMITTED ANY INCOME AS PER SECTION 115JA AND THE CASE WAS RE-OPENED AND AFTER COMPLYING WITH THE ITA NO.1037/MDS /2012 4 PROVISIONS OF THE LAW, THE AO BROUGHT TO TAX THE POOR PROFITS AS MANDATED BY THE PROVISIONS OF SECTION 115JA. DURING THE COURSE OF REOPENING ASSESSMENT PROCEEDINGS IT WAS CONTENDED ON BEHALF OF THE APPELLANT FOR MAKING A CERTAIN ADJUSTMENTS I N THE COMPUTATION OF BOOK PROFITS. THE AO DID NOT ACCEPT THE CONTENTIONS OF THE APPELLANT RELYING ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF APOLLO TYRES VS. CIT (255 ITR 273) THAT THE AO DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT (PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PART II AND PART III OF SCHEDULE VI OF THE COMPANIES ACT 1956) EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO SECTION 115JA OF THE ACT. BEFORE ME ALSO THE APPELLANT HAS SUBMITTED THAT THE FOLLOWING AMOUNTS SHOULD NOT HAVE BEEN INCLUDED IN THE BOOK PROFITS: AMOUNT WAIVED BY FINANCIAL INSTITUTIONS ` 7,62,70,868 AMOUNT WAIVED BY BANKS ` 81,94,806 4.1.1 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE ALSO CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE AO AS THE AO HAS NOT MADE ANY ADJUSTMENT IN THE BOOK PROFITS BUT HAS TAKEN ONLY THE PROFITS AS PER BOOKS. SINCE THE APPELLANT HAD NOT ADMITTED ANY INCOME UNDER SECTION 115JA, THE AO HAS TAKEN AS ITA NO.1037/MDS /2012 5 NET PROFIT AS PER BOOKS FROM THE AUDITED ACCOUNTS O F THE APPELLANT (WHICH OUGHT TO HAVE BEEN PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PART II AND PART III OF SCHEDULE VI OF THE COMPANIES ACT 1956). THE CLAIM MADE BY THE APPELLANT BEFORE THE ASSESSING OFFICER CAN ALSO BEFORE ME IS IN THE NATU RE OF A FRESH CLAIM THAT CANNOT BE ENTERTAINED IN THE REOPENED ASSESSMENT. THIS VIEW IS SUPPORTED FROM THE DECISION OF THE JURISDICTIONAL ITAT CHENNAI BEN CH IN THE CASE OF SELLA SYNERGY (INDIA) LTD. VS. ASSIS TANT COMMISSIONER OF INCOME-TAX CIRCLE-VI, CHENNAI (117 ITD 254) WHEREIN IT HAS BEEN HELD : (I) WHERE ASSESSEE HAD NOT CLAIMED BENEFIT OF EXEMPTION UNDER SECTION 10A IN ORIGINAL RETURN, NO SUCH CLAIM COULD BE MADE DURING REASSESSMENT PROCEEDINGS UNDER SECTION 143(3), READ WITH SECTION 147. (II) IN VIEW OF DECISION OF SUPREME COURT IN CIT V. SUN ENGINEERING WORKS (P) LTD. (1992) 198 ITR 297/64 TAXMAN 442, NO FRESH EXEMPTION/BENEFIT COULD BE CLAIMED BY ASSESSEE IN COURSE OF REASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE FACTS AND LEGAL POSITION THE CLAIM OF THE APPELLANT COULD NOT HAVE BEEN ENTERTAINED IN THE REASSESSMENT PROCEEDINGS AND SINCE THE AO DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT (PREPARED IN ACCORDANCE WITH THE PROVISIONS ITA NO.1037/MDS /2012 6 OF PART II AND PART III OF SCHEDULE VI OF THE COMPANIES ACT 1956) EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO SECTION 115JA OF THE ACT, THE AO HAS RIGHTLY REJECTED THE SUBMISSIONS OF THE APPELLANT. THEREFORE ALL THE GROUNDS OF APPEAL, WHICH RELATE TO THIS SOLITARY ISSUE, ARE DISMISSED. 4. ON BEING AGGRIEVED, THE ASSESSEE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE A SSESSEE STRONGLY ARGUED THAT THE ASSESSEE IS NOT LIABLE TO PAY TAX U/S 115JA OF THE ACT AS THE BOOK PROFIT AS COMPUTED IS NOT FOR THE ASSESSMENT YEAR 2000-01. 5. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER AND THE LEARNED CIT(APPEALS) BY F OLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F APOLLO TYRES (SUPRA) CAME TO THE CONCLUSION THAT THE ASSES SING OFFICER DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE BOO K PROFIT SHOWN IN THE P & L ACCOUNT (PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PART II AND PART III OF THE SCHEDULE VI OF THE ITA NO.1037/MDS /2012 7 COMPANIES ACT,. 1956) EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO SECTION 115JA OF THE ACT. IN VIEW O F THE ABOVE DECISION OF THE HON'BLE SUPREME COURT THE ASSESSING OFFICER CANNOT GO BEHIND THE PROFIT SHOWN IN THE P & L ACCO UNT AND ACCORDINGLY THE QUESTION OF ALLOWING DEDUCTION OF I NTEREST WAIVED BY THE FINANCIAL INSTITUTIONS DURING THE FIN ANCIAL YEAR 1999-2000 DOES NOT ARISE. THUS OBSERVING THE ASSES SMENT WAS COMPLETED. THE SAME WAS UPHELD BY THE LEARNED CIT( APPEALS). WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEA RNED CIT(APPEALS). IN THE CIRCUMSTANCES, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 6 TH OF DECEMBER, 2012, AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (V.DURGA RAO) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 06 TH DECEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE