The DCIT, Circle-5, Ahmedabad V. Riddhi Siddhi Gluco Biols Ltd., Ahmedabad

ITA 3243/AHD/2007

• Counselvise Citation: 324320514 RSA 2007
• Duration Of Justice: 4 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-08-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N SOPARKAR
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO. 3243/AHD/2007 A. Y.: 2004-05 THE D.C. I. T., CIRCLE-5, 2 ND FLOOR, C. U. SHAH COLLEGE BUILDING, AHMEDABAD VS RIDDHI SIDDHI GLUCO BOILS LTD. , 701, SAKAR-I, OPP. GANDHIGRAM RAILWAY STATION, AHMEDABAD PA NO. AABCR 3417 Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. L. YADAV, DR RESPONDENT BY SHRI S. N. SOPARKAR, AR DATE OF HEARING: 28-12-2011 DATE OF PRONOUNCEMENT: 29-12-12-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XI , AHMEDABAD DATED 30-05-2007, FOR ASSESSMENT YEAR 2004-05. 2. THIS DEPARTMENTAL APPEAL WAS DECIDED BY ITAT AHM EDABAD C BENCH VIDE ORDER DATED 30-07-2010. THE REVENUE PREF ERRED MISC. APPLICATION STATING THEREIN THAT GROUND NO.2 OF THE APPEAL OF THE REVENUE WAS NOT ADJUDICATED BY THE TRIBUNAL WHILE D ISMISSING THE DEPARTMENTAL APPEAL VIDE ORDER DATED 30-07-2010. TH E ORDER OF THE TRIBUNAL TO THAT EXTENT WAS RECALLED AND THE APPEAL WAS RE-FIXED BY ITA NO.3243/AHD/2007 THE DCIT, CIRCLE-5, AHMEDABAD VS RIDDHI SIDDHI GLUC O BOILS LTD. 2 ALLOWING THE MISC. APPLICATION OF THE REVENUE FOR T HE PURPOSE OF ADJUDICATION OF GROUND NO.2 OF THE APPEAL OF THE RE VENUE WHICH READS AS UNDER: 2. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G THE ASSESSING OFFICER NOT TO INCLUDE THE PRIOR PERIOD E XPENSES AND INTEREST EXPENSES DISALLOWED WHILE RECOMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. 3. THE LEARNED CIT(A) NOTED IN THE IMPUGNED ORDER T HAT THE SUBMISSION OF THE ASSESSEE WAS THAT THE AO HAS ERRE D IN LAW AND ON FACTS BY MAKING THE ADJUSTMENT WHILE MAKING COMPUTA TION OF BOOK PROFIT AS PER SECTION 115 JB OF THE IT ACT BY CONSI DERING THE ABOVE ADDITIONS AMOUNTING TO RS.39,50,000/- OF INTEREST A ND PRIOR PERIOD EXPENSES OF RS.1,24,419/-. THE ASSESSEE PLACED RELI ANCE UPON THE DECISION OF ITAT CALCUTTA SPECIAL BENCH IN THE CASE OF USHA MARTIN INDUSTRIES LTD., 104 ITD 249 AND ARGUED THAT ADJUST MENT MADE BY THE AO TO THE BOOK PROFIT WAS NOT IN ACCORDANCE WITH LA W . IT WAS, THEREFORE, SUBMITTED THAT THE AO SHOULD BE DIRECTED TO DELETE THE ADDITIONS MADE IN BOOK PROFITS U/S 115 JB OF THE IT ACT. THE LEARNED CIT(A) CONSIDERING THE ABOVE FACTS OF THE CASE IN T HE LIGHT OF THE ABOVE DECISION DIRECTED THE AO NOT TO INCLUDE THE A BOVE ADDITIONS WHILE RE-COMPUTING THE BOOK PROFIT U/S 115 JB OF TH E IT ACT. 4. THE LEARNED DR RELIED UPON THE ORDER OF THE AO. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY T HE DECISION OF THE ITA NO.3243/AHD/2007 THE DCIT, CIRCLE-5, AHMEDABAD VS RIDDHI SIDDHI GLUC O BOILS LTD. 3 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KHAI TAN CHEMICALS AND FERTILIZERS LTD., 307 ITR 150 IN WHICH IT WAS H ELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT BECAUSE OF THE PRESCRIBED ACCOUNTING STANDARD WHICH HAD TO BE FOLLOWED BY THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 115JA (2) READ WITH SECTION 211 OF THE 1956 ACT, THE ASSESSEE WAS REQUIRED TO SHOW THE PRIOR PERIOD/EXTRAORDINARY ITEMS SEPARATELY SO THAT THEIR IMPACT ON THE CURRENT PROFIT OR LOSS COULD BE PERCEIVED. THE FACT THAT THE ASSESSEE ADOPTED THE ALTERNATIVE APPROACH OF SHOWING SUCH ITEMS IN THE STATEMENT OF PROFIT AND LOSS AFTER DETERMINATION OF CURRENT NET PROFIT OR LOSS, DID NOT MEAN THAT THESE ITEMS WERE NOT TO BE TAKEN INTO ACCOUNT IN COMPUTIN G THE NET PROFIT AS ENVISAGED IN SECTION 115 JA. THUS , WHAT THE ASSESSEE HAD DONE WAS ONLY TO INDICATE THE PRIOR PERIOD ITEMS/EXTRAORDINARY ITEMS SEPARATELY. THIS DID NOT MEAN THAT THE FIGURE OF NET PROFIT WAS TO BE ARRIVED AT THE HORS THESE ITEMS. THUS, THE TRIBU NAL WAS CORRECT IN LAW IN HOLDING THAT THE ASSESSING OFFICER HAD FAILED TO APPRECIATE THAT THE NET PROFI T FOR THE PURPOSES OF SECTION 115JA WAS TO BE COMPUTED ONLY AFTER DEDUCTING THE PRIOR PERIOD EXPENSES/EXTRAORDINARY ITEMS. 5. CONSIDERING THE ABOVE FACTS IN THE LIGHT OF THE DECISION IN THE CASE OF KHAITAN CHEMICALS AND FERTILIZERS LTD. (SUP RA), WE ARE OF THE VIEW THE DIRECTION GIVEN BY THE LEARNED CIT(A) IS I N ACCORDANCE WITH LAW. THERE IS NO INFIRMITY POINTED OUT IN THE ORDER OF THE LEARNED CIT(A). BY FOLLOWING THE DECISION OF THE HONBLE DE LHI HIGH COURT IN THE CASE OF KHAITAN CHEMICALS AND FERTILIZERS LTD. (SUPRA), WE CONFIRM THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS GROU ND NO.2 OF THE APPEAL OF THE REVENUE. ITA NO.3243/AHD/2007 THE DCIT, CIRCLE-5, AHMEDABAD VS RIDDHI SIDDHI GLUC O BOILS LTD. 4 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD