ZENITH INDUSTRIAL RUBBER PRODUCTS PRIVATE LIMITED, MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX 1, MUMBAI

ITA 1110/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0363 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKAR
• Assessee Lawyers: DR K SHIVARAMADITYA AJGAONKAR
• Keywords: Depreciation; Retrospective amendment; Prejudicial to interest
• Section: 143(3); 115JB; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI PAWAN SINGH, J M ITA NO. 1110/MUM/2018 ( ASSESSMENT YEAR: 2013 - 14 ) ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. 141/144, 14 TH FLOOR, FREE PRESS HOUSE, FREE PRESS JOURNAL MARG, NARIMAN POINT, MUMBAI - 400 021 VS. PR. CIT - 1, MUMBAI PAN/GIR NO. AAACA 3874 D ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : DR. K. SHIVARAM/ADITYA AJGAONKAR RESPONDENT BY : SHRI ABHIJIT PATANKAR DATE OF HEARING : 04.09.2018 DATE OF PRONOUNCEMENT : 22.11 .2018 O R D E R PER SHAMIM YAHYA, A. M.: THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX - 1, MUMBAI ( PR .CIT FOR SHORT) DATED 12.02.2018 AND PERTAINS TO THE A SSESSMENT YE AR (A.Y.) 2013 - 14. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE ACTION OF THE LEARNED CIT IN PASSING AN ORDER U/S 263 OF THE INCOME - TAX ACT, 1961 IS BAD IN LAW AS THE ORDER OF THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTER ESTS OF THE REVENUE AND IS IN ACCORDANCE WITH THE LAW. 2. THE ACTION OF THE LEARNED CIT IN PASSING AN ORDER U/S 263 OF THE INCOME - TAX ACT, 1961 UPON A DEBATABLE ISSUE AND ALSO UPON MATERIAL ALREADY PLACED BEFORE AND EXAMINED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS IS BAD IN LAW. 3. THE ACTION OF THE LEARNED CITIN LAW IN PASSING AN ORDER U/S 263 OF THE INCOME - TAX ACT, 1961 TO ENHANCE THE BOOK PROFIT FOR THE PURPOSES OF SEC. 115JB OF THE ACT BASED ON CHANGE IN PROVISION FOR DEPRECIA TION DUE TO CHANGE OF A METHOD IS BAD IN LAW. 2 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. 3. BRIEF FACTS OF THE CASE ARE THAT THE PR. CIT IN THIS CASE HAS OBSERVED THAT O N EXAMINATION OF RECORDS, RELATING TO ASSESSMENT MADE ON 28/03/2016, U/S.143(3) OF THE I.T. ACT, 1961 FOR A.Y.2013 - 14, THAT AS PE R POINT 11 OF THE TAX AUDIT REPORT THE ASSESSEE HAS CHANGED THE METHOD OF CHARGING DEPRECIATION FROM WDV METHOD TO STRAIGHT LINE METHOD. ACCORDINGLY, THE COMPANY HAD CHANGED ITS ACCOUNTING POLICY FOR ACCOUNTING DEPRECIATION W.E.F. 01/02/2012. TH AT THE RESU LTANT EXCESS DEPRECIATION AMOUNTING TO RS.7,19,73,621/ - CHARGED IN EARLIER YEARS HAD BEEN WRITTEN BACK TO THE CREDIT OF P & L ACCOUNT DURING THE YEAR UNDER CONSIDERATION. THAT I T IS HOWEVER, SEEN THAT IN COMPUTING THE BOOK PROFIT U/S. 115JB, THE ASSESSEE C OMPANY HAS REDUCED THE DEPRECIATION WRITTEN BACK AMOUNTING TO RS.7 , 19,73,621/ - THOUGH SUCH REDUCTION WAS OUTSIDE THE SCHEME OF ADJUSTMENTS PRESCRIBED U/S.115JB OF THE ACT. TH AT TH IS AMOUNT OF RS.7,19,73,621 / - CLAIMED BY THE ASSESSEE AS DEDUCTION IN COMPUTI NG THE B OOK PROFIT U./S. 115JB WAS ALSO REMAINED TO BE ADDED BACK TO THE BOOK PROFIT WHILE COMPLETING THE ASSESSMENT VIDE ORDER DAT ED 28/03/201 6. TH AT TH IS ACTION O F THE AO IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE, HENCE, A SHOW CAUSE NOTICE U/S.263 WAS ISSUED TO THE ASSESSEE ON 12/12/2017. 4. THE ASSESSEES RESPONSE WAS NOTED BY THE LD. CIT(A) AS UNDER: THE ASSESSEE SUBMITS THAT IN THE CURRENT YEAR, IT IS NOT BEING ASSESSED AS PER THE PROVISIONS OF SEC. 115 JB, SIMILARLY IN THE YEARS PREVIOUS TO THE ASS ESSMENT YEAR IN QUESTION, EVEN THOUGH SECTION 115JB EXISTED, IT HAD BEEN ASSESSED UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT. THE ASSESSEE SUBMITS THAT IT IS BY NOW SETTLED LAW THAT ANY AMOUNT WRITTEN OFF OR RETAINED BY WAY OF PROVIDING FOR DEPRECIA TION, RENEWALS OR DIMINUTION IN VALUE OF ASSETS, IS INCLUDED IN THE DEFINITION OF 'PROVISION' HOWEVER, VARIOUS BENCHES OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL HAVE HELD THAT THE WRITE BACK OF DEPRECIATION IN THE PROFIT AND LOSS ACCOUNT DUE TO CHANGE O F METHOD OF DEPRECIATION GIVING DUE REGARDS TO RELEVANT ACCOUNTING STANDARDS AND THE PROVISIONS OF THE COMPANIES ACT SHALL BE REDUCED FROM THE 3 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. PROFIT AS PER THE PROFIT AND LOSS ACCOUNT WHILE ARRIVING AT THE BOOK PROFITS OF THE ASSESSING FOR THE PURPOSE OF 115JB AND 115JB SUBJECT TO THE ADHERENCE TO THE PROVISO TO EXPLANATION TO EACH SECTION RESPECTIVELY. THE ASSESSEE RELIES UPON THE JUDGMENT OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF PSI DATA SYSTEMS LTD. VS. DCIT[1999] 69 ITD 7 (COCHIN). FURTHER, THE JURISD ICTIONOL MUMBAI BENCH OF THE HON'BLE INCOME TAX APPELLATE TNBUNAL IN THE CASE OF DCIT VS. ABG HEAVY INDUSTRIES LTD. [2007} 1O7 ITD 287 (MUMBAI). 4. THE ASSESSEE SUBMITS THAT IN THE PREVIOUS YEARS, THE TAX. WAS PAID AS PER THE REGULAR PR OVISIONS OF THE INCOME TAX ACT AND THAT EVEN IF THE BOOK PROFIT OF THE PREVIOUS YEARS WAS TO BE ADJUSTED ACCORDING TO THE QUANTUM OF EXCESS DEPRECIATION CLAIMED IN THAT PREVIOUS YEAR DUE TO DIFFERENCE IN METHOD OF COMPUTATION OF DEPRECIATION, THE ASSESSMEN T WOULD STILL BE DONE BY THE UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND THEREFORE, THE ASSESSEE WOULD, BE ELIGIBLE TO CLAIM THE DEDUCTION OF DEPRECIATION WRITTEN BACK IN THE CURRENT ASSESSMENT YEAR. THE ASSESSEE RELIES UPON THE JUDGEMENT OF THE HON'BLE INCOME TAX APPELLATE TNBUNAL IN THE CASE OF ACIT VS. SRINIVAS SYNTHETICS PACKERS P. LTD,[2009] 122 ITJ 832 (AGRA). 5. THE ASSESSEE SUBMITS THAT THE FACTUAL MATRIX OF THE CURRENT CASE FALLS WITHIN THE PROPOSITIONS PROPOUNDED BY THE ORDERS OF THE V ARIOUS BENCHES OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL AND REPRODUCED ABOVE AND HENCE ARE IN CONFORMITY WITH THE ACCEPTED LEGAL POSITION. THE ASSESSES THEREFORE SUBMITS THAT THE ACTION OF THE ASSESSEE IN REDUCING THE AMOUNT OF WRITE BACK OF THE DEPREC IATION DUE TO CHANGE OF METHOD OF DEPRECIATION WHILE COMPUTING BOOK PROFITS AS PER PROVISIONS OF SECTION 115JB OF THE INCOME TAX ACT IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HENCE THIS IS NOT A FIT CASE FOR INVOKING SECTION 2 63 OF THE INCOME TAX ACT. 6. THE ASSESSEE THEREFORE SUBMITS THAT IN THE LIGHT OF THE SETTLED POSITION OF LAW AS LAID DOWN BY THE VARIOUS CASE LAW RELIED UPON BY THE ASSESSEE, THE PROPOSED ACTION U/S.263 SHOULD NOT BE PURSUED AND THE CURRENT PROCEEDINGS SH OULD BE DROPPED. WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT THE ABOVE - CASE LAW AS RELIED UPON SHOW AT THE LEAST THAT THE SAID ISSUE IS DEBATABLE ONE AND PROCEEDINGS U/S.263 OF THE INCOME TAX ACT. ARE NOT. WARRANTED WHERE THE ISSUES RAISED ARE DEBATABLE A S HELD IN GRASIM INDUSTRIES LTD. VS. CIT 12010] 321 ITR 92 (BOMBAY HC) WHERE THE HON'BLE JUNSDICT TONAL HIGH COURT, HELD THAT IN CASE OF DEBATABLE ISSUE ON WHICH MORE THAN ONE PLAUSIBLE MEW INS REASONABLY POSSIBLE AND IF ASSESSING OFFICER TAKES ONE PLAUSIB LE VIEW, IT CANNOT BE SAID THAT ASSESSMENT IS ERRONEOUS OR PREJUDICIAL TO INTEREST OF REVENUE. 7. THE ASSESSEE SUBMITS THAT IT HAS RELIED UPON VARIOUS JUDGEMENTS AND PROPOSITIONS IN ORDER TO REPRESENT ITS CASE AS TO WHY THE PROPOSED ACTION U/S.263 SHOULD NOT BE PURSUED. THE ASSESSEE SUBMITS THAT IN CASE YOUR HONOUR WISHES TO RELY UPON ANY OTHER JUDGEMENTS / AUTHORITIES OR BRING OUT ANY OTHER FACET OF THE 4 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. CASE THAT MAY HAVE REMAINED UNEXPLORED OR UNEXPLAINED, OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE TO ME ET THE SAID QUERIES ON THEIR MERITS. 5. HOWEVER, THE PR. CIT WAS NOT CONVINCED . HE REJECTED THE ASSESSEES SUBMISSIONS AND HELD AS UNDER: 8. I HAVE CAREFULLY CONSIDERED T HE SUBMISSIONS MADE BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE AND HAVE ALS O GONE THROUGH THE FACTS OF THE CASE. THE FACT THAT THE DEPRECIATION AMOUNTING TO RS.7,19,73,621/ - HAS BEEN WRITTEN BACK TO THE CREDIT OF THE PROFIT & LOSS ACCOUNT DURING THE ASSESSMENT YEAR 2013 - 2014 AND THE SAME HAS BEEN CLAIMED AS DEDUCTION WHILE COMPUT ING THE BOOK PROFIT U/S, 115JB(2) IS NOT IN DISPUTE. IT IS THE ARGUMENT OF THE ASSESSEE THAT THE DEDUCTION OF THE AMOUNT OF RS. 7,19,63,621/ - ON ACCOUNT OF DEPRECIATION WRITTEN BACK WHILE COMPUTING THE BOOK PROFIT U/S.L!5JB(2) IS AN ALLOWABLE DEDUCTION UND ER CLAUSE(I) OF LHE EXPLANATION (1) TO SECTION 115JB(2). 8.1 ON PERUSAL OF THE RECORDS, IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY AS TO WHETHER THE AMOUNT OF DEPRECIATION WRITTEN BACK TO THE CREDIT OF THE PROFIT & LOSS ACCOUNT COULD BE CONSIDERED FOR DEDUCTION AS AN AMOUNT SET ASIDE AS PROVISION FOR DIMINUTION IN THE VALUE OF ANY ASSET UNDER CLAUSE(I) OF THE EXPLANATION (1) TO SECTION 1.15JB(2). IT HAS BEEN HELD BY THE HON'BLE AHMEDABAD BENCH OF THE ITAT IN THE CASE OF HILACHI HOME & LI FE SOLUTION (INDIA) LTD. VS. DCIT (2017) 163 ITD 1 (AHMEDABAD TRIB.) THAT WHERE ASSESSEE BESIDES OTHER PROVISIONS HAD PROVIDED PROVISION OF RS. 40 LAKHS IN PROFIT & LOSS ACCOUNL TOWARDS LOSS ON ASSETS FOR DISPOSAL AND AO WHILE COMPUTING BOOK PROFIT HAD NOT MADE ENQUIRY ON SAID PROVISION AND ACCEPTED THE SAME, THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. 9. IN THE LIGHT OF THE DISCUSSION IN THE PRECEDING PARAGRAPH, I AM OF OPINION THAT ORDER U/S. 143(3) DATED 28/03/2016 FOR THE ASSESSMENT YEAR 2013 - 2014 IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE THE SAID ORDER U/S .1 43(3) DATED 28/03/2016 FOR AY 2013 - 2014 IS SET ASIDE TO BE DONE AFRESH DE NOVO. THE AO IS DIRECTED TO EXAMINE THE CLAIM OF THE ASSESS EE WITH REGARD TO THE DEPRECIATION OF RS.7,19,73,621/ - WRITTEN BACK TO THE CREDIT, OF THE PROFIT AND LOSS ACCOUNT BEING AN ALLOWABLE DEDUCTION IN THE COMPUTATION OF THE BOOK PROFIT U/S. 11 5JB(2) UNDER CLAUSE (I) OF THE EXPLANATION (1) TO SECTION 115JB(2), T HE AO WILL EXAMINE THE DECISION RELIED UPON BY THE ASSESSEE AS ALSO OTHER DECISIONS ON THE SAID ISSUE AND DECIDE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. THE AO 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US 7. THE LD. COUNSEL O F THE ASSESSEE SUMMARIZED HIS SUBMISSIONS AS UNDER: 5 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. 1. AS THE ASSESSING OFFICER HAD SCRUTINIZED THE BOOKS OF ACCOUNTS AS PLACED BEFORE HIM AND ACCEPTED THE COMPUTATION U/S 115JB OF THE ACT. IT CANNOT BE SAID THAT THE ORDER WAS PASSED WITHOUT DUE APPL ICATION OF MIND. 2. ORDER OF A.O. IS AS PER LAW HENCE A CLAIM WHICH PER SE DOES NOT REQUIRE ANY DISCUSSION AND THE A.O. ACCEPTING THE SAME WITHOUT DISCUSSION CANNOT BE BROUGHT WITHIN THE SCOPE OF S. 263 OF THE ACT. 3. THE JURISDICTIONAL CONDITI ON PRECEDENT TO THE APPLICATION OF S. 263 IS THAT THE ORDER SOUGHT TO BE REVISED MUST BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE NEITHER OF THESE CONDITIONS SATISFIED. 4. EXCESS OF BOOK DEPRECIATION WRITTEN OFF OVER DEPREC ATION ALLOWANCE AS PER LAW IS A 'RESERVE' CIT V. PROTOS ENGG. CO. P. LTD. [1994] 207 ITR 831 (BOM.)(HC) (PAPER BOOK NO. - II PG. NO. 68 - 73) (PARA 20 PG. 73) 5. WHERE THE ASSESSEE HAD, WITH REFERENCE TO THE RETURN FOR EACH OF THE FOUR PRECEDING YEARS, S HOWN THAT THE TAX FOR THOSE YEARS STOOD COMPUTED UNDER THE REGULAR PROVISIONS, EVEN AS THE MAT PROVISION (SECTION 115JB) WAS APPLICABLE FOR THE SAID YEARS, THE REASON FOR CHANGE OF DEPRECIATION METHOD WAS GENUINE, AND THAT THE PROVISIONS OF SEC. 115JB WERE COMPLIED WITH, THE AMOUNT OF EXCESS PROVISION FOR DEPRECIATION FOR THE EARLIER YEARS WRITTEN BACK BY THE ASSESSEE IN ACCOUNTS FOR ONE YEAR UNDER CONSIDERATION COULD NOT BE ADDED TO THE BOOK PROFITS WHEN IT WAS SHOWN BY THE ASSESSEE THAT IN THE PREVIOUS YE ARS THERE HAD BEEN NO CLAIM OF TAX REDUCTION QUA AMOUNT OF BOOK PROFIT REPRESENTED BY EXCESS DEPRECIATION IN EARLIER YEARS. ACIT V. SRINIVAS SYNTHETICS PACKERS P. LTD. [2009] 122 TTJ 832 (AGRA) (TRIB.) (PAPER BOOK NO. - II PG. NO. 55 - 79) (PG. 58 PA RA 6.3) 6. 'ANY AMOUNT WRITTEN OFF OR RETAINED BY WAY OF PROVIDING FOR DEPRECIATION, RENEWALS OR DIMINUTION IN VALUE OF ASSETS, IS INCLUDED IN THE DEFINITION OF 'PROVISION' AND SO THE EXCESS AMOUNT OF DEPRECIATION PROVIDED FOR IN THE EARLIER YEARS WO ULD QUALIFY UNDER CLAUSE (1) OF THE EXPLANATION TO SECTION 115J, FOR REDUCTION AS THE AMOUNT WITHDRAWN FROM RESERVES OR PROVISION, IF ANY SUCH AMOUNT IS CREDITED TO THE PROFIT AND LOSS ACCOUNT. THE SUM CREDITED TO THE P&L ACCOUNT IS TO BE. THEREFORE, REDUC ED, TO ARRIVE AT THE BOOK PROFIT FOR THE PURPOSE OF SECTION 115.1. PSI DATA SYSTEMS LTD. V. DCIT [1999] 69 ITD 7 (COCHIN) (TRIB.) (PAPER BOOK NO. - II PG. NO. 35 - 41) (PG. NO. 40, PARA 6) 7. 'THE DECISION IN PSI DATA SYSTEMS ( SUPRA) IS DIRECTLY IN THE CONTEXT OF CLAUSE (I) OF EXPLANATION TO SECTION 115JAWHICH IS SIMILAR TO CLAUSE (I) OF THE EXPLANATION TO SECTION 115JA. WE ARE IN RESPECTFUL AGREEMENT WITH THE OBSERVATIONS MADE IN THE AFORESAID CASE. LEARNED SENIOR COUNSEL IS QUITE RIGHT IN PLACING R ELIANCE ON THE AFORESAID DECISION. WE, THEREFORE, HOLD THAT THE EXCESS DEPRECIATION PROVIDED IN THE BOOKS IN EARLIER YEARS IS IN THE NATURE OF PROVISION OR RESERVE FOR THE PURPOSES OF CLAUSE (I).' THE ONLY FURTHER CONDITION AS IMPOSED BY THE TRIBUNAL IS TH AT THE PROVISO OF SEC. 115.TB EXPLANATION [1] MUST ALSO BE FULFILLED. DCIT V. ABC HEAVY INDUSTRIES LTD. |2007| 107 ITD 287 (MUM.)(TRIB.) (PAPER BOOK NO. - II PG. NO. 42 - 54) (PG. NO. 54, PARA 34) 6 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. 8. EXPLANATION L(I) TO 115JB IS PARIMATERIA WITH CL. (I) OF EXPLANATION TO SECTION 11 5J& 115JB. ACIT V. SRINIVAS SYNTHETICS PACKERS P. LTD. [2009] 122 TTJ 832 (AGRA) (TRIB.) (PAPER BOOK NO. - II PG. NO. 55 - 79) (PG. NO. 58 PARA 6.2) 9. IN CASE OF A DEBATABLE ISSUE ON WHICH MORE THAN ONE PLAUSIBLE VIE W IS REASONABLY POSSIBLE AND IF ASSESSING OFFICER TAKES ONE PLAUSIBLE VIEW, IT CANNOT BE SAID THAT ASSESSMENT IS ERRONEOUS OR PREJUDICIAL TO INTEREST OF REVENUE. AS THE STAND OF THE APPELLANT AS ACCEPTED BY THE ASSESSING OFFICER WAS ONE PLAUSIBLE STAND THA T WAS CORRECT IN LAW, THE ASSESSMENT IS NEITHER ERRONEOUS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE AS IT IS CORRECT IN LAW. [FOLLOWED MALABAR INDUSTRIAL CO. LTD. VS. CIT (2000) 243 ITR 83 (SC) / CIT VS. MAX INDIA LTD. (2007) 295 ITR 282 (SC)J GRASIM INDUSTRIES LTD. V. CIT [2010] 321 ITR 92 (BOM.) (HC) (PAPER BOOK NO. - II PG. NO. 25 - 34) (PG. 33 - 34 PARA 15) 10. VIEW ACCEPTED BY THE A.O. IS SUPPORTED BY VARIOUS JUDGEMENTS OF THE TRIBUNAL. WHICH WERE AVAILABLE WHEN THE ORDER WAS PASSED HENCE THE ORDER OF A.O. CANNOT BE SAID TO BE ERRONEOUS. 1 1 . THE CASE LAW RELIED BY THE CIT HITACHI HOME & LIFE SOLUTION (INDIA) LTD. VS. DY. CIT (2017) 163 ITD 1 (AHD.)(TRIB.) LOSS ON ASSETS DEBITED TO P & L A/C. AND ALSO AMENDMENT U/S. 115JB WITH RETROSPECTIVE EFFECT FROM 1/4/2001. BASED ON FACTS THE REVISION WAS UPHELD. IN THE CASE BEFORE AHMEDABAD TRIBUNAL. THE VIEW TAKEN BY THE A.O. WAS NOT SUPPORTED BY ANY DECISION OF TRIBUNAL. HENCE, THE RATIO CANNOT BE APPLIED TO THE FACTS OF THE CASE. 12. IN VIEW OF ABOVE RE VISION ORDER MAY BE SET ASIDE AND QUASHED. 8. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THIS ISSUE IS QUITE DEBATABLE AS THE LD. CIT(A) HAS NOT AT ALL REFERRED OR CONSIDERED THE ITAT DECISION REFERRED IN SUBMISSION BEFORE HIM, BUT HAS REFERRE D TO ANOTHER AHMEDABAD ITAT DECISION. 9. THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) ON THE O THER HAND RELIED UPON THE ORDER OF THE LD. C IT(A). HE ALSO PLACED RELIANCE OF HONBLE SUPREME COURT DECISION IN THE CASE OF APOLLO TYRES LTD. VS. CIT [2002] 255 ITR 273 (SC) AND SUBMITTED THAT REWORKING OF ACCOUNT IS NOT PERMISSIBLE. 10. UPON CAREFUL CONSIDERATION, WE FIND THAT ADJUSTMENT OF THE DEPRECATION WRITTEN BACK WAS DULY SHOWN IN THE COMPUTATION OF INCOME. IT IS ONLY ON THE BASIS O F THIS 7 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. COMPU TATION OF INCOME, AND EXAMINATION THEREOF THE A.O. HAS ALLOWED THE COMPUTATION U/S. 143(3). HENCE, IT CANNOT BE SAID THAT THE A.O. HAS NOT APPLIED HIS MIND ON THIS ISSUE. IN THIS REGARD, REFERENCE IS MADE TO HON'BLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF SBI VS. ACIT ( IN WP NO. 271 OF 2018 VIDE ORDER DATED 15.06.2018 ) . 11. FURTHERMORE, THE ADJUSTMENT OF D EPRECATION WRITTEN BACK IN THE COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB HAS BEEN CONSIDERED BY THE ITAT BENCH IN FAVOUR OF THE ASSESSEE IN THE CASE OF ACIT VS. SRINIVAS SYNTHETICS PACKERS P. LTD (SUPRA) AND PSI DATA SYSTEMS LTD . (SUPRA). THESE CASE LAWS WERE REFERRED BEFORE THE LD. CIT(A) BUT HE CHOOSE T O IGNORE THE SAME. ADMITTEDLY, WHEN THERE ARE ITAT DECISIONS IN FAVOUR OF THE ASSESSEE , IT CANNOT BE SAID THAT THE VIEW ADOPTED BY THE A.O. IS NOT A POSSIBLE VIEW. ONCE IT IS HELD THAT T H E A.O. HAS ADOPTED A POSSIBLE VIEW , THE JURISDICTION EXERCISED BY THE LD. CIT(A) U/S. 263 LOSSES ITS LEGALITY. THIS VIEW IS SUPPORTED BY THE HONBLE APEX C OURT DECISION IN THE CASE OF CIT (CENTRAL) VS. MAX INDIA LTD. [2007] 295 ITR 282 (SC) AND HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF GRASIM INDUSTRIES LTD. (SUPRA). 1 2 . IN THE BACKGROUND OF THE ABOVE DISCUSSION AND PRECEDENT, WE QUASH THE ORDER PAS SED BY THE LD. CIT(A) U/S. 263 OF THE ACT. 1 3 . IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.11.2018 SD/ - SD/ - ( PAWAN SINGH ) (S HAMIM YAHYA) J UDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI ; DATED : 22.11.2018 ROSHANI , SR. PS 8 ITA NO. 1110/MUM/2018 ZENITH INDUSTRIAL RUBBER PRODUCTS PVT. LTD. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI