M/S. INDIAN SOYA INDUSTRIES, Indore V. THE DCIT 1(1), Indore

ITA 607/IND/2013

• Counselvise Citation: 60722714 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHANE
• Assessee Lawyers: S S DESHPANDE; PIYUSH MANDOVRA CAS
• Keywords: Unexplained cash credit; Income from undisclosed sources; Assessment record
• Section: 143(3); 133A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 607 /IND/2013 A.Y. : 2010-11 M/S. INDIAN SOYA INDUSTRIES, DY. CIT, 1(1), INDORE VS. INDORE. APPELLANT RESPONDENT PAN NO.AAACT6419A APPELLANTS BY : SHRI S.S.DESHPANDE AND SHRI PIYUSH MANDOVRA, CAS RESPONDENT BY : SHRI RAJEEV VARSHANE, CIT DR DATE OF HEARING : 6.10.2015. DATE OF PRONOUNCEMENT : 22 .12.2015 M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 2 2 O R D E R PER D. T. GARASIA, J.M. TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER CIT(A)-I, INDORE, DATED 23.08.2013 FOR ASSESSMENT Y EAR 2010-11. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE I S HAVING AN OIL REFINERY AND SOLVENT EXTRACTION PLANT OF SOY ABEAN. THE ASSESSEE HAS SHOWN INCOME FROM SOYABEAN OIL AND INC OME FROM OTHER SOURCES. DURING THE YEAR UNDER CONSIDERATION, A SURVEY U/S 133A OF THE ACT WAS CARRIED OUT ON 23.02.2010. DURING THE COURSE OF SURVEY PROCEEDINGS, STATEMENTS OF SHRI NA NDLAL JHAVAR AND SHRI CHANDRA PRAKASH MAHESHWARI WERE RECORDED U /S 131. THEY HAVE ADMITTED UNACCOUNTED INCOME OF RS. 8,15,0 0,000/- OVER AND ABOVE ASSESSEE COMPANY AS PER BREAK-UP GIV EN BELOW :- ASSESSMENT YEAR RS. 2008 - 09 2,84,75,126/ - 2009 - 10 2,44,10,650/ - 2010 - 11 2,86,14,224/ - M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 3 3 3. THE ASSESSEE HAS ADMITTED UNACCOUNTED INCOME OF RS. 2,86,14,224/- PERTAINING TO ASSESSMENT YEAR 2009-10 , WHICH READS AS UNDER :- (I) UNEXPLAINED CREDIT ENTRIES RS. 2,82,17,030/ - (II) DIFFERENCE IN STOCK RS. 1,78,094/ - (III) OTHER MISC. DISCREPANCIES IN BOOKS OF ACCOUNT RS. 2,19,100/ - RS.2,86,14,224/- 4. THE ASSESSEE HAS OFFERED THE SAME INCOME IN RESPECT IVE ASSESSMENT YEARS AND PAID TAXES THEREON. THE AO HAS RECOMPUTED THE BOOK PROFIT AND ON EXAMINATION OF TH E STATEMENT OF COMPUTATION OF INCOME, IT HAS NOTICED THAT THE ASSESSEE HAS SHOWN BOOK PROFIT AT RS. 3,80,83,921/- . ON FURTHER EXAMINATION OF PROFIT AND LOSS ACCOUNT, IT WAS NOTICED THAT THE ASSESSEE HAS CREDITED A SUM OF RS. 5,28,85 ,776/- UNDER THE HEAD PRIOR PERIOD ADJUSTMENT INCOME OF EA RLIER YEARS OFFERED U/S 133A OF THE INCOME-TAX ACT, 1961. 5. IT WAS NOTICED THAT THE ASSESSEE HAS WORKED OUT THE TAX LIABILITY OF RS. 1,03,63,335/- U/S 115JB ON THE BOO K PROFIT OF M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 4 4 RS. 3,30,82,922/ - . THE ASSESSEE HA D NOT CONSIDERED THE INCOME ADMITTED IN EARLIER YEAR IN THE COMPUTATION OF BOO K PROFIT FOR THE PURPOSE OF COMPUTATION OF TAX LIABILITY U/S 115 JB OF THE INCOME-TAX ACT, 1961. THE AO HAS GIVEN SHOW CAUSE N OTICE AND AFTER ANALYZING THE SECTION 115JB(2) AND THE PROVIS IONS OF PART II & III OF SCHEDULE VI TO THE COMPANIES ACT, 1956, AND THE SUBMISSIONS OF THE ASSESSEE, THE AO HAS HELD AS UND ER :- 4.2.4 THE ASSESSEE VIDE ITS LETT ER DATED 21.09.2012 HAD MADE ITS SUBMISSION. IT WAS SUBMITTED :- 2.12 THE COMPUTATION OF MAT IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 115JB WHEREIN IT IS PRESCRIBED THAT THE BOOK PROFIT MEANS THE NET PROFI T AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR UNDER SUB SECTION 2, AS INCREASED BY SUB SECTION 2 PRESCRIBED THAT FOR THE PURPOSE OF SECTION 115JB, A COMPANY ASSESSEE SHALL PREPARE ITS PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIO US YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS II & M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 5 5 III OF SCHEDULE VI OF THE COMPANIES ACT, 1956. THE ASSESSEE COMPANY HAS ACCORDINGLY PREPARED ITS PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIO US YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS II AND III OF SCHEDULE VI OF THE COMPANIES ACT, 1956. ALSO NO WHERE IN EXPLANATION I OF SECTION 115JB, PRIOR PERIOD ADJUSTMENTS ARE STATED TO BE ADDED FOR THE PURPOSES OF COMPUTING BOOK PROFIT. ALTERNATIVELY, AS EVIDENT FROM THE ASSESSMENT & SURVEY RECORD, THE SAID PRIOR PERIOD ADJUSTMENT OF RS. 5,28,85,776/- IS NOTHING BUT UNDISCLOSED INCOME PERTAINING TO EARLIER YEARS I.E. FOR ASSESSMENT YEAR 08- 09 & 09-10, WHICH WAS ADMITTED IN THE SURVEY U/S 133A. IT IS ALSO EVIDENT FROM THE ASSESSMENT RECORD FOR ASSESSMENT YEAR 08- 09 & 09-10 THAT THE SAID INCOME HAS BEEN INCLUDED IN THE RETURN OF ASSESSEE COMPANY AND DUE TAXES ON THE SAME HAVE BEEN PAID. M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 6 6 THUS YOUR PROPOSITION FOR AGAINST TAXING THE SAID INCOME U/S 115JB WILL RESULT INTO DOUBLE TAXATION WHICH IS NOT IN ACCORDANCE WITH LAW. 4.2.5 I HAVE CAREFULLY GONE THROUGH THE ASSESSEE S SUBMISSION SUPRA AND NOTICED THAT ITS ARGUMENTS MAY BE CLASSIFIED AS UNDER:- (I) THE BOOK PROFIT WAS DERIVED AS PER THE PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PARTS II & III OF SCHEDULE VI OF THE COMPANIES ACT, 1956. (II) AS PER EXPLANATION I OF 115JB NO PRIOR PERIOD ADJUSTMENTS WERE LEGISLATED TO BE MADE FOR THE PURPOSES OF COMPUTING BOOK PROFIT . (III) THE TAX ON THE INCOME PERTAININ G TO EARLIER YEARS HAD ALREADY BEEN PAID AND THEREFORE THE INCLUSION OF THE SAME IN THE BOOK PROFIT U/S 115JB WOULD TANTAMOUNT TO DOUBLE TAXATION. M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 7 7 6. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 7. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSION, WHICH READS AS UNDER:- THAT A SURVEY U/S 133(A) OF THE INCOM E TAX ACT WAS CARRIED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY ON 23.02.10. AN AMOUNT OF RS. 8,15,00,000/- WAS ADMITTED AS INCOME BEING UNEXPLAINED CREDIT ENTRIES IN THE BOOKS IN RELEVANT YEARS BY THE DIRECTORS AND THE BREAKUP OF THE SAID IS AS UNDER:- ASSESSMENT YEAR RS. 2008 - 09 2,84,75,126/ - 2009 - 10 2,44,10,650/ - 2010 - 11 2,86,14,224/ - 8,15,00,000/- THE ASSESSEE COMPANY OFFERED THE ABOVE INCOME PERTAINING TO A.Y.O8-09 & 09-10 BY REVISING ITS M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 8 8 EARLIER FILED RETURNS AND PAID THE DUE TAXES THEREON AND ACCORDINGLY THE ASSESSMENTS U/S 143(3) STANDS FRAMED VIDE ORDERS DT.30.04.10 AND 18.11.11. THE SURRENDERED INCOME PERTAINING TO EARLIER ASSESSMENT YEARS I.E. A Y 08-09 & 09- 10 TOTALING RS.5,28,85,776/- WAS CREDITED TO THE PROFIT & LOSS ACCOUNT, BELOW THE LINE IN THE PREVIOUS YEAR RELEVANT TO A Y 10-11. THE COMPUTATION OF BOOK PROFIT & TAX U/S 115JB IS AS PER ANNEXURE 'A' TO FORM NO.29B AS PREPARED, CERTIFIED & SIGNED BY THE AUDITOR OF THE ASSESSEE COMPANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A DETAILED SUBMISSION REGARDING THE COMPUTATION U/S 115JB WAS FURNISHED WHICH STANDS INCORPORATED IN ASSESSMENT ORDER. WHILE FRAMING THE ASSESSMENT, THE LD. AO M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 9 9 OPINED THAT SURRENDERED INCOME P ERTAINING TO EARLIER ASSESSMENT YEARS I.E. A Y 08-09 & 09-10 TOTALING RS.5,28,85,776/- WHICH WAS CREDITED TO THE PROFIT & LOSS ACCOUNT FOR AY 10-11, BELOW THE LINE, WAS ALSO INCLUDABLE IN THE BOOK PROFIT FOR THE PURPOSES OF COMPUTING TAX LIABILITY U/S 115JB AND ACCORDINGLY HE CALCULATED THE BOOK PROFIT AT RS. 9,09,68,697/-- AND CALCULATED THE TAX U/S 115JB AT RS. 1,36,45,304/-. IN FIRST APPEAL PROCEEDINGS, A DETAILS WRITTEN SUBMISSION ON THE ISSUE STANDS SUBMITTED BEFORE THE LD. CIT(A). IT IS HUMBLY SUBMITTED THAT SURRENDERED INCOME PERTAINING TO EARLIER ASSESSMENT YEARS I.E. A Y O8-09 & 09-10 TOTALING RS. 5,28,85,776/- HAS ALREADY SUFFERED TAXATION AT NORMAL RATES IN RESPECTIVE ASSESSMENT YEARS AND THEREFORE AGAIN INCLUDING THE SAID INCOME FOR CALCULATION OF BOOK PROFIT FOR THE PURPOSES OF SEC.115JB IS CLEARLY M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 10 10 DOUBLE TAXATION WHICH IS NOT THE INTENT & MOTIVE OF LEGISLATIVE SANCTION. IN SUPPORT OF THIS PROPOSITION, RELIANCE IS PLACED ON THE FOLLOWING JUDGMENTS:- LAXMIPAT SINGHANIA VS. CIT (1969) 72 ITR 291 (SC), 'IT IS A FUNDAMENTAL RULE OF LAW OF TAXATION THAT, UNLESS OTHERWISE EXPRESSLY PROVIDED, INCOME CANNOT BE TAXED TWICE. AGAIN, IT IS NOT OPEN TO THE INCOME TAX OFFICER, IF INCOME HAS ACCRUED TO THE ASSESSEE, AND IS LIABLE TO BE INCLUDED IN THE TOTAL INCOME OF A PARTICULAR YEAR, TO IGNORE THE ACCRUAL AND THEREAFTER TO TAX IT AS INCOME OF ANOTHER YEAR ON THE BASIS OF RECEIPT' CIT VS, NAGARJUNA FERTILIZERS & CHEMICALS LTD. (2015) 373 ITR 252 (T&AP) COMPANY - BOOK PROFIT - COMPUTATION .. - PROFITS OR LOSS TO BE TAKEN INTO ACCOUNT MUST RELATE TO M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 11 11 RELEVANT PREVIOUS YEAR - AMOUNT TAXED EARLIER BUT SHOWN IN BOOKS - NOT INCLUDIBLE IN BOOK PROFITS - INCOME TAX ACT, 1961, S.115J. ONE OF THE CARDINAL PRINCIPLES OF TAXATION IS THAT NO AMOUNT SHALL BE BROUGHT UNDER THE PURVIEW OF TAXATION, UNLESS THERE IS SPECIFIC LEGISLATIVE SANCTION FOR IT. IF ONE TAKES INTO ACCOUNT THE COMPLEX AND COMPLICATED SCHEME UNDER THE INCOME TAX ACT, 1961, IT IS EVIDENT THAT PARLIAMENT HAS TAKEN EVERY PRECAUTION TO ENSURE THAT NO AMOUNT IS SUBJECT TO TAXATION TWICE, UNLESS THE RELEVANT PROVISION SPECIFICALLY PERMITS IT. IN THE SAID JUDGMENT, THE HON'BLE HIGH COURT HAS REFERRED TO THE JUDGMENT OF APEX COURT IN THE CASE OF LAXMIPAT SINGHANIA VS. CIT (1969) 72 ITR 291 (SC), IN VIEW OF THE ABOVE, IT IS HUMBLY PRAYED THAT M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 12 12 THE ADDITION OF RS. 5,28,85,776/- MADE TO THE BOOK PROFIT FOR THE PURPOSES OF SEC.115JB BY THE AO AND MAINTAINED BY LD.CIT(A) DESERVES TO BE DELETED. 8. ON THE OTHER HAND, THE LD. CIT DR RELIED UPON THE O RDER OF THE CIT(A). THE LD. CIT DR SUBMITTED THAT IN THIS C ASE THE ASSESSEE HAS OFFERED ADDITIONAL INCOME OF RS. 5.28 CRORES. AS ADMITTED DURING THE COURSE OF SURVEY, THIS AMOUNT W AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2010-11 AS PRIOR PERIOD INCOME. AS PER SECTION 115JB(2) OF THE INCOME-TAX ACT, 1961, EVERY ASSESSEE, BEING A COMPANY, FOR THE PURPOSE OF THIS SECTION, HAS OFFERED THE INCOME BEING A COMPAN Y, SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS PROFIT AN D LOSS FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVI SIONS OF PART II AND III OF THE SCHEDULE VI TO THE COMPANIES ACT, 1956. HON'BLE DELHI COURT IN THE CASE OF CIT VS. KHAITAN CHEMICALS AND FERTILIZERS LIMITED, (2008) 307 ITR 150 (DEL), WHEREIN IT IS HELD THAT SUCH COMPUTATION ON NET PROFIT IN VIEW OF THE M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 13 13 PRESCRIBED ACCOUNTING STANDARD REQUIRED THE PRIOR P ERIOD EXPENSES ITEM SHOULD BE SHOWN SEPARATELY. THIS DOES NOT MEAN THAT BECAUSE THESE ITEMS WERE SHOWN SEPARATELY, THE Y DID NOT CONSTITUTE THE PART OF NET PROFIT. IF THE PRIOR PER IOD ITEM IS AN INCOME, IT WOULD GO TOWARDS INCREASING THE NET P ROFIT OR REDUCING THE LOSS AS THE CASE MAY BE. THEREFORE, IN THE LIGHT OF THIS JUDGMENT AS PER SECTION 115JB OF THE ACT, THE ASSESSEE HIMSELF HAS SHOWN THE PRIOR PERIOD INCOME IN PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2010-11 IN THE COMPUTAT ION OF MINIMUM ALTERNATIVE TAX U/S 115JB OF THE ACT. THE A SSESSEE WAS UNABLE TO ANSWER AS THE PROVISION HAS BEEN MADE ON SECTION 115JB OF THE ACT. WE FIND THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION FOR PRIOR PERIOD INCOME. THE LD. CIT DR RELIED UPON THE DECISION OF HON'BLE MADRAS HIGH COU RT IN THE CASE OF CIT VS. SWAMIJI MILLS LIMITED, (2012) 342 I TR 250 (MAD), WHEREIN IT IS HELD THAT BONUS LIABILITY WAS INCURRE D ONLY IN THE RELEVANT PREVIOUS YEAR AND HENCE IN COMPUTING THE I NCOME UNDER THE INCOME-TAX ACT, 1961, AS PER THE NORMAL COMPUTATION, THIS EXPENDITURE WAS TO BE CONSIDERED AND GIVEN M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 14 14 DEDUCTION TOO. WHEN THE LIABILITY ACCRUED FOR THE FIRST TIME IN TH E RELEVANT PREVIOUS YEAR AND HAD BEEN DISCLOSED IN TH E RELEVANT PREVIOUS YEAR WITH REFERENCE TO THE REQUIREMENTS UN DER SCHEDULE VI TO THE COMPANIES ACT FOR THE PURPOSE OF THE INCOME-TAX ACT, 1961, IT COULD NOT BE TREATED AS RE LATING TO A PRIOR PERIOD, BECAUSE, IN THE PRIOR PERIOD, THE LIA BILITY ITSELF HAD NOT ACCRUED TO THE ASSESSEE, BUT THE HON'BLE HIGH C OURT HAS HELD THAT WHEN THE PROFIT AND LOSS ACCOUNT OF THE A SSESSEE DISCLOSED THE NET PROFIT IN ACCORDANCE WITH PART II AND III OF SCHEDULE VI OF THE COMPANIES ACT, THE ASSESSEE WAS NOT ENTITLED TO HAVE THE DEDUCTION OF AMOUNTS DEBITED IN THE PRO FIT AND LOSS APPROPRIATION ACCOUNT IN THE COMPUTATION OF THE NET PROFIT. THEREFORE, THE LD. CIT(A) IS JUSTIFIED IN HIS ACTIO N. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. THE BRIEF FACTS OF THE CASE ARE THAT THE SURVEY ACT ION WAS CARRIED OUT BY THE INCOME TAX DEPARTMENT ON 23.02.2010 AT T HE BUSINESS PREMISES OF THE ASSESSEE AND DURING THE SU RVEY CONCEALED INCOME OF RS. 2.84 CRORES, RS. 2.44 CRORE S AND RS. 2.86 CRORES WAS DETECTED FOR ASSESSMENT YEARS 2008- 09, 2009- M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 15 15 10 AND 2010 - 11 RESPECTIVELY. SUCH ADDITIONAL INCOME WAS DISCLOSED BY THE ASSESSEE. BY THE TIME SUCH DISCLOS URE WAS MADE, THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR ASS ESSMENT YEARS 2008-09 AND ASSESSMENT YEAR 2009-10 WERE ALRE ADY CLOSED. HENCE, THE INCOME DISCLOSED FOR THIS YEAR C OULD NOT BE INCLUDED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE A SSESSEE HIMSELF HAS INCLUDED SUCH ADDITIONAL INCOME OF RS. 5.28 CRORES, RS. 2.80 CRORES FOR ASSESSMENT YEAR 2008-09 AND RS. 2.44 CRORES FOR ASSESSMENT YEAR 2009-10 IN THE BOOKS OF ACCOUNTS FOR ASSESSMENT YEAR 2010-11 AND HIMSELF HAS SHOWN THE A MOUNT IN PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2010-11 AS PRIOR PERIOD INCOME. WE FIND THAT AS PER SECTION 115JB(2) OF THE INCOME-TAX ACT, 1961, WHICH SAYS THAT EVERY ASSESSE E, BEING A COMPANY, SHALL, FOR THE PURPOSE OF THIS SECTION, PR EPARE ITS PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF PART II AND III OF THE SCHED ULE VI OF COMPANIES ACT, 1956. THAT BEING SO, THE ASSESSEE HA D NO ESCAPE FROM SHOWING SUCH PRIOR PERIOD INCOME FOR RS . 5.28 CRORES PERTAINING TO ASSESSMENT YEAR 2008-09 AND AS SESSMENT M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 16 16 YEAR 2009 - 10 IN ASSESSMENT YEAR 2009 - 10, BECAUSE THAT INCOME COULD NOT BE INCORPORATED IN THOSE YEARS BY THE ASS ESSEE, NOT BECAUSE OF ANY HINDRANCE, SINCE THE ASSESSEE CONCEA LED SUCH INCOME FOR THESE YEARS AND TOOK A CONSCIOUS DECISIO N NEITHER TO INCORPORATE THE SAME IN ITS BOOKS NOR PAY THE TAXES ON THE SAME. THE ASSESSEE IS A CORPORATE COMPANY AND ASSES SEE HAS TO PREPARE THE PROFIT AND LOSS ACCOUNT AS PER CORPO RATE ACCOUNTING METHOD. IN VIEW OF THE ACTUAL POSITION D ESCRIBED AS ABOVE, THE ASSESSEE HAD NO OPTION BUT TO DISCLOSE S UCH PRIOR PERIOD INCOME IN PROFIT AND LOSS ACCOUNT FOR ASSESS MENT YEAR 2010-11. THE HON'BLE DELHI HIGH COURT IN THE CASE O F CIT VS. KHAITAN CHEMICALS AND FERTILIZERS LIMITED, (2008) 3 07 ITR 150 (DEL),HAS HELD THAT WHILE CALCULATING THE TAX U/S 1 15JA OF THE INCOME-TAX ACT, 1961, THE ASSESSEE COMPUTED THE NET PROFIT AS PER THE PROFIT AND LOSS ACCOUNT NOT REDUCING THE PR IOR PERIOD EXPENSES. THE AMOUNT OF PRIOR PERIOD EXPENSES CAN B E DEDUCTED FOR ARRIVING THE NET PROFIT FOR THE PURPOSE OF SECT ION 115JB. THE PRESCRIBED ACCOUNTING STANDARD WHICH HAS TO BE FOLL OWED BY THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 115JB (2) READ WITH M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 17 17 SECTION 211 OF 19 56 COMPANIES ACT . WE ALSO GET SUPPORT FROM THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CA SE OF TAMIL NADU CEMENTS CORPORATION LIMITED VS. JT. CIT, (2012 ) 349 ITR 58 (MAD), WHEREIN THE HON'BLE MADRAS HIGH COURT HAS FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE O F APOLLO TYRES LIMITED VS. CIT, (2002) 255 ITR 273 ( S. C.), WHEREIN IT IS HELD THAT SUB SECTION (1A) OF SECTION 115JB OF THE INCOME-TAX ACT, 1961, DOES NOT EMPOWER THE AO TO EMBARK UPON A FRESH ENQUIRY WITH REGARD TO ENTRIES MADE IN THE BOOKS OF ACCOUNT OF THE COMPANY. SUB-SECTION (1A) MANDATE THE COMPANY T O MAINTAIN ITS ACCOUNT IN ACCORDANCE WITH THE REQUIRE MENT OF THE COMPANIES ACT, 1956, AND ASSESSING AUTHORITY HAS LI MITED JURISDICTION TO SATISFY HIMSELF THAT THE ACCOUNT WA S MAINTAINED IN ACCORDANCE WITH THE PROVISIONS OF 1956 ACT. BEYO ND THAT THE ASSESSING AUTHORITY HAD NO JURISDICTION TO GO FURTH ER INTO ACCOUNTS. FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT, THE HON'BLE MADRAS HIGH HAS HELD THAT WHILE COMPUTI NG THE NET PROFIT, THE ASSESSEE HAD ADJUSTED THE PRIOR PERIOD EXPENSES AND OFFERED THE BOOK PROFIT FOR THE ASSESSMENT YEAR. N O EXCEPTION M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 18 18 COULD BE TAKEN TO COURSE ADOPTED BY THE ASSESSEE IN ADJUSTING THE PRIOR PERIOD EXPENSES IN COMPUTING THE NET PROF IT. WE ARE OF THE VIEW THAT IT IS THE ONUS CAST ON THE ASSESSEE T O TELL AS TO WHICH PROVISIONS OF SECTION 115JB OF THE ACT PERMIT S THE REMOVAL OF SUCH PRIOR PERIOD INCOME SHOWN BY THE AS SESSEE HIMSELF IN THE PROFIT AND LOSS ACCOUNT FOR ASSESSME NT YEAR 2010- 11, IN COMPUTATION OF MINIMUM ALTERNATIVE TAX U/S 1 15JB OF THE INCOME-TAX ACT, 1961. 10. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE HAS CITED DECISION OF HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. M/S. NAGARJUNA FE RTILIZERS IN I.T.A.NO. 100 OF 2003, WHEREIN THE HON'BLE HIGH COU RT HAS HELD THAT IT WAS THE CASE OF THE ASSESSEE RESPONDENT THA T IT HAD DEPOSITED A SUM OF RS. 4,28,17,995/-. THIS INCLUDED A SUM OF RS. 3,81,48,960/- WHICH IS SAID TO BE INTEREST ON I NTER CORPORATE DEPOSIT FOR FOUR CONSECUTIVE PREVIOUS ASSESSMENT YE ARS I.E. 1985-86 TO 1988-89. THE COPY WAS APPENDED WITH THE RETURN WITH A REQUEST TO EXCLUDE THIS AMOUNT OF RS. 3,81,4 8,960/- FROM THE ASSESSMENT BY STATING THAT THE SAID AMOUNT IS R EFERABLE TO M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 19 19 EARLIER ASSESSMENT YEAR AND ALSO SUPPORT TO TAX. THEREFORE, THE HON'BLE HIGH COURT HAS HELD THAT THE ASSESSEE IS JU STIFIED AND, MOREOVER, THE HON'BLE HIGH COURT HAS HELD THAT WHEN THIS APPEAL WAS DECIDED BY THE TRIBUNAL, THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF APOLLO TYRES WAS NOT I N EXISTENCE. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE MIS ERABLY FAILED TO PROVE THAT PRIOR PERIOD INCOME SHOWN BY THE ASSE SSEE FOR ASSESSMENT YEAR 2010-11 IN COMPUTATION OF ALTERNATI VE MINIMUM TAX U/S 115JB OF THE INCOME-TAX ACT, 1961, PERMITS THE REMOVAL OF SUCH PRIOR PERIOD INCOME. THE ASSESS EE HAS FAILED TO PROVE THAT SECTION 115JB OF THE ACT IS AN OVER-R IDING SECTION WHICH STARTS WITH A PHRASE - NOTWITHSTANDING ANYTHI NG CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, THAT IS NOT A NORMAL TAX, BUT A MINIMUM ALTERNATIVE TAX AND ASSES SEE WAS FORCED TO ADD SOME PRIOR PERIOD EXPENSES FOR ASSESS MENT YEAR 2010-11, BECAUSE SUCH INCOME WAS DETECTED IN SURVEY AFTER CLOSURE OF BOOKS OF THIS YEAR. HENCE, SUCH INCOME W AS INCORPORATED IN ASSESSMENT YEAR 2010-11 AS PER STAT UTORY REQUIREMENT OF SECTION 115JB(2) OF THE INCOME-TAX A CT, 1961. M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 20 20 IN VIEW OF THIS, WE HAVE NO HESITATION TO CONFIRM T HE ADDITION OF RS. 5.28 CRORES UPHELD BY THE ASSESSEE HIMSELF AS P RIOR PERIOD INCOME IN COMPUTATION OF INCOME U/S 115JB OF THE IN COME-TAX ACT, 1961. WE ALSO HOLD THAT THE ISSUE IN CONTROVER SY IS SQUARELY COVERED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF APOLLO TYRES, (2002) 122 TAXMAN 562 AND HON'BLE MAD RAS HIGH COURT IN THE CASE OF TAMIL NADU CEMENTS CORPORATION LIMITED VS. JT. CIT, (2012) 349 ITR 58 (MAD). 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 22 ND DECEMBER, 2015. CPU* 2311 M/S.INDIAN SOYA INDUSTRIES LIMITED, INDORE VS. DY.C IT,1(1),INDORE I.T.A.NO. 607/IND/2013 A.Y. 2010-11 21 21