M/s Apeejay Private Limited, Kolkata V. D.C.I.T CC - III,kolkata, Kolkata

ITA 2455/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4530 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 12-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 15-10-2013
• Court: TRIBUNAL
• Assessee Lawyers: MANISH TIWARI
• Section: 143(3); 115JB; 263

Judgement Text

I.T.A. NO. 2455/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISHWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2455/KOL/2013 ASSESSMENT YEAR: 2006-2007 M/S. APEEJAY PVT. LIMITED,......................... .........................APPELLANT APEEJAY HOUSE, 15, PARK STREET, KOLKATA-700 016 [PAN: AADCA 1160 F] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. .............RESPONDENT CENTRAL CIRCLE-III, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 APPEARANCES BY: SHRI MANISH TIWARI, FCA, FOR THE ASSESSEE SHRI RAJAT KUMAR KUREEL, JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 12, 2016 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 7 TH , 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-1 , KOLKATA DATED 16.07.2013 AND THE SOLITARY GROUND RAISED THEREIN R EADS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(APPEALS), CENTRAL-1, KOLKATA IS WRONG AND UNJUSTIFIED IN HOLDING THE PROFIT & LOSS ACCOUNT AS NOT IN ACCORDING WITH PART-II AND III OF SCHEDULE-VI OF TH E COMPANIES ACT AND THEREBY CONSIDERING PROFIT ON SAL E OF SHARES OF RS.1,58,15,000/- AS PART OF BOOK PROFIT R ELEVANT TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INVESTMEN T COMPANY. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3 ) VIDE AN ORDER DATED 26.12.2008, THE TOTAL INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OF THE ACT WAS DETERMINED BY THE ASSESSI NG OFFICER AT RS.39,87,110/-, WHILE THE BOOK PROFIT UNDER SECTION 115JB WAS COMPUTED I.T.A. NO. 2455/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 4 BY HIM AT RS.1,04,49,157/-. THE SAID ASSESSMENT MAD E BY THE ASSESSING OFFICER WAS SUBSEQUENTLY REVISED BY THE LD. CIT VID E ORDER DATED 17.01.2011 PASSED UNDER SECTION 263, INTER ALIA, ON THE GROUND THAT THERE WAS AN ERROR IN NOT INCLUDING THE PROFIT ON SALE OF SHARES WHILE COMPUTING THE BOOKS PROFIT UNDER SECTION 115JB. AS PER THE DI RECTION OF THE LD. CIT GIVEN IN THE ORDER UNDER SECTION 263, THIS ISSUE WA S EXAMINED BY THE ASSESSING OFFICER. ON SUCH EXAMINATION, HE FOUND TH AT THE ASSESSEE- COMPANY HAD SOLD 26,24,000 SHARES OF APIA FINANCE G ROUP PVT. LIMITED ON 01.04.2005 BUT THE BOOK PROFIT ON SUCH SALE AMOUNTI NG TO RS.1,58,15,000/- WAS NOT REFLECTED IN ITS FINAL ACC OUNTS. THE ASSESSEE CLAIMED THIS MISTAKE OF NON-RECOGNITION OF BOOK PRO FIT ON SALE OF SHARES IN THE FINAL ACCOUNTS FOR FINANCIAL YEAR 2005-06 AS AN OVERSIGHT AND SUBMITTED THAT SUCH MISTAKE WAS RECTIFIED BY SHOWIN G THE SAID PROFIT IN THE FINAL ACCOUNTS OF F.Y. 2006-07 AS A PRIOR PERIO D ITEM, WHICH WAS PERMISSIBLE AS PER ACCOUNTING STANDARD 5. IT WAS AL SO CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE RELEVANT PROF IT HAVING BEEN SHOWN IN THE FINAL ACCOUNTS OF FINANCIAL YEAR 2006-07 AS PRI OR PERIOD ITEM, THE SAME COULD NOT BE INCLUDED IN THE BOOK PROFIT OF F. Y. 2005-06 RELEVANT TO THE YEAR UNDER CONSIDERATION. THIS CONTENTION OF TH E ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER AND IN TH E ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 26 3 VIDE AN ORDER DATED 09.10.2011, THE ADDITION TO THE BOOK PROFIT W AS MADE BY HIM, INTER ALIA, ON ACCOUNT OF PROFIT ON SALE OF SHARES AMOUNT ING TO RS.1,58,15,000/-. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT EVEN THOUGH THE RELEVANT SHARES WERE SOLD BY THE ASSESSEE AS ON 01. 04.2005, THE PROFIT ON SUCH SALE WAS NOT DISCLOSED IN ITS PROFIT & LOSS A/ C. FOR THE YEAR UNDER CONSIDERATION. THE SAID PROFIT & LOSS ACCOUNT FORME D PART OF THE FINAL ACCOUNTS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION, WHICH WAS DULY I.T.A. NO. 2455/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 4 AUDITED AND SUBMITTED TO THE REGISTRAR OF COMPANIES AFTER THE APPROVAL OF THE A.G.M. THIS ERROR OF OMISSION STATED TO BE COMM ITTED BY OVERSIGHT WAS RECTIFIED BY THE ASSESSEE BY SHOWING THE PROFIT ON SALE OF SHARES IN THE FINAL ACCOUNTS FOR F.Y. 2006-07 AS PRIOR PERIOD ITE M, WHICH AGAIN WERE DULY AUDITED AND FILED WITH THE REGISTRAR OF COMPAN IES AFTER THE APPROVAL OF A.G.M. THE LEGAL POSITION IN THIS REGARD IS NOW WELL SETTLED, INTER ALIA, BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES REPORTED IN 255 ITR 273 THAT ONCE THE FINAL ACCOUNT S PREPARED AS PER THE COMPANIES ACT ARE DULY AUDITED AND FILED WITH THE R EGISTRAR OF COMPANIES AFTER GETTING THE APPROVAL OF AGM, THE PROFIT REFLE CTED THEREIN CANNOT BE TINKERED WITH BY THE ASSESSING OFFICER WHILE COMPUT ING THE BOOK PROFIT UNDER SECTION 115JB EXCEPT TO THE EXTENT OF ADJUSTM ENTS PERMISSIBLE AS SPECIFIED IN EXPLANATION TO SECTION 115JB. SINCE TH E ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALE OF SHARES IS N OT COVERED BY SUCH PERMISSIBLE ADJUSTMENT, WE FIND MERIT IN THE CONTEN TION OF THE LD. COUNSEL FOR THE ASSESSEE THAT NO SUCH ADDITION CAN BE MADE WHILE COMPUTING THE BOOK PROFIT OF THE ASSESSEE FOR THE YEAR UNDER CONS IDERATION UNDER SECTION 115JB. THIS AMOUNT OF PROFIT ON SALE OF SHA RES IS INCLUDIBLE IN THE BOOK PROFIT OF THE ASSESSEE FOR THE FINANCIAL YEAR 2006-07 AS THE SAME WAS DULY REFLECTED IN THE FINAL ACCOUNTS OF THE SAID YE AR. EVEN THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HA S NO OBJECTION IF THE ASSESSING OFFICER IS DIRECTED TO INCLUDE THE SAME I N THE BOOK PROFIT FOR A.Y. 2007-08. ACCORDINGLY, WE DELETE THE ADDITION M ADE TO THE BOOK PROFIT OF THE ASSESSEE-COMPANY FOR THE YEAR UNDER CONSIDER ATION ON ACCOUNT OF PROFIT ON SALE OF SHARES AMOUNTING TO RS.1,58,15,00 0/- WITH A DIRECTION TO THE ASSESSING OFFICER TO CONSIDER THE SAME FOR A.Y. 2007-08. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 7 TH , 2016. SD/- SD/- (S.S. VISHWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 7 TH DAY OF SEPTEMBER, 2016 I.T.A. NO. 2455/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 4 ORDER PRONOUNCED BY SD/- SD/- (J.M.) (A.M.) S.S.V.R. W.A. COPIES TO : (1) M/S. APEEJAY PVT. LIMITED, APEEJAY HOUSE, 15, PARK STREET, KOLKATA-700 016 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 (3) COMMISSIONER OF INCOME TAX (APPEALS),CENTRAL- 1, KOLKATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.