The ACIT, Circle-1(1)(1), Ahmedabad V. M/s. Duravit India Pvt. Ltd., Ahmedabad

ITA 445/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9282 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Ahmedabad
• Next Hearing Date: 11-12-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 28-05-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRIMUKESHSHAH; .ASSESSESHASPOINTEDOUTINGROUNDSOFAPPEALNO.THATTHEAODIDNOTALLOWTHEDEDUCTIONOFRS
• Keywords: Depreciation

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’B’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRISIDDHARTHANAUTIYAL,JUDICIALMEMBER आयकरअपीलसं./ITANo.445/AHD/2023 धििाधरणवरध / Asstt.Year:2016-2017 TheA.C.I.T, Circle-1(1)(1), Ahmedabad. Vs. M/s.DuravitIndiaPvt.Ltd., 61Titanium, NearPrahaladnagarAUDAGrade, Prahaladnagar, Ahmedabad-380015. PAN:AACCD3485F (Applicant)(Respondent) Revenueby:Dr.DarsiSumanRatnam,CIT.D.R Assesseeby:ShriMukeshShah,A.R सुिवाईकीतारीख /DateofHearing:12/12/2023 घोरणाकीतारीख/DateofPronouncement:03/01/2024 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: Thecaptionedappealhasbeenfiledattheinstanceoftherevenueagainst theorderoftheNationalFacelessAppealCentre(NFAC),arisinginthematterof assessmentorderpassedunders.154oftheIncomeTaxAct,1961(here-in-after referredtoas"theAct")relevanttotheAssessmentYear2016-17. ITAno.445/AHD/2023 A.Y.2016-17 2 2.TheRevenuehasraisedthefollowinggroundsofappeal: 1.Whetheronfactsandcircumstancesandinlaw,theLd.CIT(A)haserredindeletingthe booksprofitu/s.115JBatRs.8,99,28,099/-determinedbytheAOconsideringalltherelevant documentslikeP&Laccount.Balancesheet,formNo.29Bandform3CDandthefactsofthe case. 2.Theappellantcravesleavetoamendoralteranygroundoraddanewground,whichmay benecessary. 3.Itis,therefore,prayedthattheorderofLd.CIT(A)maybesetasideandthatofthe AssessingOfficerberestored. 3.TheonlyissueraisedbytherevenueisthatthelearnedCIT-Aerredin calculatingtheamountofbookprofitatnilwhichwasdeterminedbytheAOat₹ 8,99,8099.00undersection115JBoftheAct. 4.Thenecessaryfactsarisingfromtheorderoftheauthoritiesbelowarethat theassesseeinthepresentcase,aprivatelimitedcompany,isengagedinthe businessofdealinginwashbasins,sinks,andsanitarywareetc.Theassesseefor theyearunderconsiderationhasfileditsreturnofincomedeclaringanincomeof Rs.NILwhichwasassessedbytheAOintheassessmentframedundersection 143(3)oftheActdated26-11-2018at₹98,77,791.00onlyundernormal computationofincome.TheAOinsuchassessmentorderhasalsodeterminedthe bookprofitatRs.NILundertheprovisionsofsection115JBoftheAct. 4.1However,theAOsubsequentlyinitiatedtherectificationproceedingsunder section154oftheAct.AspertheAO,theassesseehastakentheprofitasper profitandlossaccountatRs.21,37,74,740/-forthepurposeofbookprofitunder section115JBoftheActagainstwhichtheamountofbroughtforward unabsorbedlossofRs.12,38,26,381/-wereadjusted.Thus,theAOdetermined thebookprofitatRs.8,99,28,099/-forcalculatingtheliabilityunderthe provisionsofsection115JBoftheActintherectificationorderpassedunder section154oftheActdated04-08-2021. ITAno.445/AHD/2023 A.Y.2016-17 3 5.Aggrievedassesseepreferredanappealtotheld.CIT-A. 6.Theassesseebeforetheld.CIT-Asubmittedthatithasworkedoutthe amountofbookprofitasperform29BatNILundersection115JBoftheAct.As pertheassessee,therewascrediteditsprofitandlossaccountbytheamountof deferredtaxliabilityamountingtoRs.19,43,32,844/-whichwastobeadjustedin arrivingtobookprofit.ButtheAOhasnotconsideredthesame. 6.1Likewise,theassesseefurthersubmittedthatAOincomputingthe unabsorbedlosshastakenwrongamountoflossforAY2010-11and2011-12 lowerbytheamountbyRs.5,65,276.00and14,157.00only. 6.2Theassesseefurthersubmittedthattherewaspositiveincomebefore depreciationofRs.14,70,607.00fortheAY2014-15againstwhichtherewas madeaclaimofdepreciationofRs.9,22,14,685.00whicheffectivelyresultedin unabsorbeddepreciationofRs.9,07,44,078.00only.ButtheAOwronglyreduced thelossesagainstthepositiveincomeofRs.14,70,607.00whilecalculatingthe amountofbroughtforwardlossestobeadjustedincalculatingthebookprofit undersection115JBoftheAct. 7.ThelearnedCIT-Aafterconsideringthesubmissionallowedtheappealof theassesseebyobservingasunder: 9.Assesseshaspointedoutingroundsofappealno.1thattheAOdidnotallowthedeductionofRs. 19,43,32,844/-fromthenetprofitforderivingthebookprofit.FromperusalofScheduleMATofthe returnandFormNo.29B,itisfoundthattheclaimoftheassesseeiscorrect.TheAssessingofficer inhisorderatpara3hastakenthebookprofitatRs.21,37,74,480/-.Narrationis,BookProfitasper Form29BforAY2016-17,21,37,74,480/-"Butthisisnotcorrect,bookprofitasperform29Bis0 (NIL).Thisisthefigureappearingatrow12oftheform29B.Rs.21,37,74,480/-istheNetProfitat row8oftheform29B.Thisissuewasmentionedbytheassesseecompanyinpara12inits submissiondated01.03.2021,submittedon02.03.2021.However,theorderoftheAOissilenton thisissue.AOhasnotreducedtheamountofdeferredtaxofRs.19,43,32,844/-creditedtoP&L Accountbeforearrivingthefigureofbookprofit.So,thisgroundoftheassesseeisallowed.AO shouldallowdeferredtaxofRs.19,43,32,844/-beforearrivingthefigureofbookprofit. 10.Nextgroundofappealisofnotconsideringtheamountofunabsorbeddepreciationandbusiness lossesrelatedtoA.Y.2010-11and2011-12aspertheAuditedFinancialsoftherespectiveprevious ITAno.445/AHD/2023 A.Y.2016-17 4 yearsrelevanttothoseassessmentyears.Theissuehasbeenconsidered.Theassesseehad contentedthisinitssubmissiondated02.04.2021atpara13.ThefiguresoflosstakenbyAOfor A.Y.2010-11and2011-12wereRs.1,70,97,065/-andRs.9,33,80,369/-respectively.However,the correctfiguresasperthecontentionoftheassesseewereRs.1,76,62,341/-andRs.9,33,94,526/-. So,thecorrectfiguresreportedbytheassesseewereslightlyhigher.Assesseeinthesupportofthe claimhadandhasenclosedannexure-6whichiscopyofauditedProfitandLossAccountfor F.Y.2010-11.AOhasnotgivenanycommentuponthis,inhisorder.Thefiguresmentionedbythe assesseearecorrectasperP&LA/c.So,thisgroundoftheassesseeisalsoallowed.AOshould allowtheclaimoftheassesseeasstatedabove. 11.ThirdgroundofappealisaboutcalculationoflesseramountofaggregatelossesfromAY2010- 11to2013-14byRs.14,70,607/-.Asalreadydiscussedabovewhichdealingwithgroundno.2.AO hascalculatedtheamountofaggregatelossesforAY2010-11and2011-12lessbyRs.5,65,276/- andRs.14,157/-respectively.Fromperusalofthetableatpara3oftheOrderu/s154,itisfound thatforA.Y.2014-15figurei.e.Rs.14,70,607/-ratherthanbeingaddedwiththefigureof Rs.92,21,465/-incolumn3hasbeensubtractedandarrivedatRs.9,07,44,078atcolumn4.So,net lossfor2014-15hasbeencalculatedatareducedfigureofRs.14,70,607/-.Thecontentionofthe assesseeiscorrectandthisgroundisalsoallowed.AOshouldrectifythemistake. 8.Beingaggrievedbytheorderoftheld.CIT-A,theRevenueisinappeal beforeus. 9.ThelearnedDRbeforeusreiteratedthefindingscontainedintheorder passedundersection154oftheAct. 10.Ontheotherhand,theld.ARbeforeusfiledapaperbookrunningfrom pages1to19andvehementlysupportedtheorderoftheLd.CIT-A. 11.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Theexplanation1tosection115JBoftheActdeals withthecalculationofthebookprofit.Thesubclause(viii)ofexplanation1to section115JBoftheActrequiresthatifanyamountiscreditedtotheprofitand lossaccountbytheamountofdeferredtax,thenthesameshouldbereduced fromtheamountofprofitshownbytheassesseeintheprofitandlossaccountto work-outthebookprofit.Onperusaloftheprofitandlossaccount,wenotethat theassesseehascrediteditsprofitandlossaccountwiththeamountofdeferred taxofRs.19,43,32,844/-whichtheAOhasnotadjustedwhilecalculatingthe profit.Accordingly,weholdthatsuchadjustmenthasbeenmadecorrectlybythe ld.CIT-A. ITAno.445/AHD/2023 A.Y.2016-17 5 11.1Regardingtheamountofbroughtforwardlosses,wefindthattheAOhas takensuchlossesatRs.1,70,97,065.00andRs.9,33,80,369.00respectively pertainingtotheAYs2010-11and2011-12whereasthecorrectamountoflosses asevidentfromtheincometaxreturnplacedonpage12ofthePBstandsatRs. 1,76,62,341.00and9,33,94,525.00respectively.Accordingly,wedonotfindany infirmityintheadjustmentmadebyld.CIT-A. 11.2Movingfurther,wenotethattheAOhasalsowronglyreducedtheamount ofpositiveincomeofRs.14,70,607.00pertainingtotheAY2014-15whereasthe samewasadjustedagainsttheunabsorbeddepreciation.Assuchtheamountof lossshownbytheassesseeshallremainthesame.Accordingly,weholdthatsuch adjustmenthasbeenmadecorrectlybytheld.CIT-A. 11.3Iftheaboveadjustmentsaremadewhilecalculatingthebookprofitofthe assesseeundersection115JBoftheAct,wefindthattherecomesbookprofitat Rs.NILwhichhasbeencorrectlydeterminedbyld.CIT-A.Accordingly,wedonot findanyreasontointerfereinthefindinggivenbytheld.CIT-A.Hence,the groundofappealoftherevenueisherebydismissed. 12.Intheresult,theappealfiledbytheRevenueisherebydismissed. OrderpronouncedintheCourton03/01/2024atAhmedabad. Sd/- Sd/-Sd/- (SIDDHARTHANAUTIYAL)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated03/01/2024 Manish