DCIT CIR 3(3), MUMBAI V. RISHIROOP RUBBER INTERNATIONAL LTD, MUMBAI

ITA 6906/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92500 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 09-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2013
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Depreciation; Question of law; Wrong claim; Difference of opinion
• Section: 143(3); 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI . . , , BEFORE : SHRI R.C.SHARMA, AM & SHRI VIJAY PAL RAO , JM ./ ITA NO. 69 06 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 10 - 11 ) DCIT, CR 3(3), MUMBAI VS. M/S RISHIROOP RUBBER INTERNATIONAL LTD., 65 ATLANTA NARIMAN POINT, MUMBAI - 400021 ./ ./ PAN/GIR NO. : A A BCR 1789 B ( / APPELL ANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI LOVE KUMAR /ASSESSEE BY : SHRI JAYESH DADIA / DATE OF HEARING : 27 / 0 4 /201 5 / DATE OF PRONOUNCEMENT : 08/05/2015 / O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 7, MUMBAI , DATED 1 2 - 9 - 2013 , FOR THE ASSESSMENT YEAR 20 10 - 11 , IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE I.T.ACT . 2. THE ONLY GRIEVA NCE OF THE REVENUE RELATE TO CIT(A)S ACTION FOR DELETING THE ADDITION MADE U/S.115JB ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON DISCARDED PLANT AND MACHINERY. 3 . AT THE OUTSET, LD. AR PLACED ON RECORD ORDER OF JURISDICTIONAL TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS IN THE CASE OF RISHIROOP RUBBER INTERNATIONAL LTD., DECIDED IN ITA NO.6689 & 471/MUM/2 010, VIDE ORDER ITA NO. 69 0 6 /20 1 3 2 DATED 20 - 1 - 2012, WHEREIN EXACTLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND FOUND THAT DIS ALLOWANCE OF DEPRECIATION WHILE COMPUTING U/S.115JB WAS DELETED BY THE CIT(A) AFTER OBSERVING AS UNDER : - IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. VS. CIT(2002) 255 ITR 273 (SC) THAT THE AO WHILE COMPUTING THE INCOME U/S.115JB, HAS ONLY THE POWER OF EXAMINING WHETHER THE BOOKS OF ACCOUNTS ARE CERTIFIED BY THE AUTHORITIES UNDER THE COMPANIES ACT AS HAVING BEEN PROPERLY MAINTAINED IN ACCORDANCE WITH THE COMPANIES ACT. THE AO HAS THE LIMITED POWER OF MAKING INCREASES AND REDUCTION AS PROVIDED IN EXPLANATION 1 TO SECTION 115JB. TO PUT IT DIFFERENTLY THE AO DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFITS SHOWN IN THE P & L ACCOUNT EXCEPT TO THE EXTENT PROVIDED IN EXPLANATION 1 TO SECTION 115JB. IN VIEW OF THE ABO VE, THE ADDITION OF RS.1,00,28,206/ - MADE BY THE AO IS DELETED. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT THE CLAI M OF DEPRECIATION ON FACTORY BUILDING A ND MACHINERY HAS BEEN REJECTED W H ILE COMPUTING THE BOOK PROFIT U/S.115JB ON THE GROUND THAT NO SUCH ASSETS HAS BEEN PUT TO USE DURING THAT PERIOD. AO ASKED THE A/R OF THE ASSESSEE TO FURNISH THE WORKING OF DEPRECIATION CLAIMED ON SUCH UNUSED FACTORY BUILDING AND PLANT AND MACHINERY. THE ASSESSEE SUBMITTED THE WORKING OF D EPREC IATION AND ALSO STATED THA T THE DISALLOWANCE MAD E IN EARLIER YEARS HAS BEEN DELETED BY THE C IT ( A). T HE AO OBSERVE D THAT THE DEPARTMENT HAS FILED THE APPEAL BEFORE THE ITAT AGAINST THE ORDER OF THE CIT(A). IN VIEW OF THE ABOVE, HE REJECTED THE CLAIM OF DEPR E C I ATION ON SUCH UNUSED ASSETS AMOUNTING TO RS. 1,00,28,206/ - AND MADE AN ADDITION OF THE SAME TO THE BOOK PROFIT. WE FOUND THAT IN THE ASSESSMENT YEAR 2006 - 07 & 2007 - 08 , THE TRIBUNAL VIDE ORDER DATED 20 - 1 - ITA NO. 69 0 6 /20 1 3 3 2012 ALLOWED THE SIMILAR CLAIM OF ASSESSEE AFTER HA VING THE FOLLOWING OBSERVATION S: 17. WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE MOOT QUESTION ARISES IS WHETHER THE ASSESSING OFFICER WHILE COMPUTATION BOOK PROFIT U/S 115JB CAN LOOK INTO DEPRECIATION PROVIDED IN THE BOOKS OF ACCOUNT ON THE ASSETS WHICH HAVE ALREADY BEEN DISCARDED AND NOT IN USE BECAUSE OF THE ACTIVITY PERMANENTLY CLOSED, IS PERMITTED AS PER THE AS - 6 AS WELL AS UNDER THE PROVISIONS OF COMPANIES ACT. THE CIT(A) HAS DEALT WITH THE ISSUE IN PAGES 5 & 6 AS UNDER : 'IN THE ASSESSMENT ORDER THE AO HAS CLEARLY MENTIONED THAT AS PER THE AGREEMENT DATED 14/07/2005 ENTERED BETWEEN THE ASSESSEE AND THE IDBI FOR IMPLEMENTATION OF MONTREAL PROTOCOL THE ASSESSEE IS UNDER OBLIGATION TO DESTROY THE ENTIRE SET UP BEFORE 3 1/12/2005 OR BY THE EXTENDED DATE. HENCE THE ASSETS CANNOT BE USED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS AND IN CASE THE ASSETS ARE USED, THE ASSESSEE WOULD BE LIABLE TO BE PENALIZED. TO COMPENSATE THE ASSESSEE A COMPENSATION OF `. 15.60 CR ORES HAVE BEEN PAID TO THE COMPANY. AS DISCUSSED IN THE GROUND NO.1 ABOVE THAT THE ASSETS HAVE BEEN PUT TO USE FOR THE PURPOSE OF BUSINESS DURING THE YEAR UNDER CONSIDERATION, THEREFORE NO DEPRECIATION CLAIM OF FACTORY BUILDING AND PLANT D MACHINERY CAN BE ALLOWED TO THE APPELLANT. SINCE, THE CLAIM OF DEPRECIATION WAS A WRONG CLAIM MADE BY THE APPELLANT HENCE, PROFITS WERE WRONGLY CALCULATED TO THAT EXTENT IN THE ACCOUNTS OF THE APPELLANT. AS THE PROFITS WERE NOT CORRECTLY COMPUTED AS PER LAW THEREFORE I HO LD THAT THE AC WAS JUSTIFIED IN MAKING ADJUSTMENTS TO THAT EXTENT IN THE NET PROFIT DECLARED BY THE APPELLANT FOR THE PURPOSE OF COMPUTING BOOK PROFIT U/S. 115JB OF THE ACT. AS REGARDING THE CLAIM OF THE APPELLANT THAT THE NET PROFIT AS PER THE P&L ACCOUNT ONCE ADOPTED BY THE SHARE - HOLDERS CANNOT BE DISTURBED IN VIEW OF THE HON'BLE APEX COURT DECISION GIVEN IN THE CASE OF APOLLO TYRES LTD. 255 ITR 273. IN THIS REGARD I WOULD LIKE TO OBSERVE THAT IF THIS ANALOGY OF THE APPELLANT IS FOLLOWED IN EVERY CASE THE N IT WILL RENDER THE PROVISIONS OF THE I.T. ACT INFRUCTUOUS. FURTHER, I WOULD LIKE TO OBSERVE THAT THE DECISION OF THE HON'BLE APEX COURT WAS BASED ON DIFFERENT FACTS WHERE THERE WAS NO SUCH ISSUE OF ANY PRIMA FADE WRONG CLAIM OF ANY DEDUCTION, MORE SO OF ANY SUCH WRONG CLAIM OF DEPRECIATION U/S. 32 WHERE THE COMPANY UNDER MANDATORY LAW WAS FORCED TO SHUT DOWN ITS MANUFACTURING ESTABLISHMENT. FURTHER, WITH THE PASSAGE OF TIME THERE IS ALSO DIMINUTION IN THE VALUE OF THE SAID ASSETS EVEN THOUGH THEY ARE NOT USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE DURING THE YEAR AND AS SUCH THE SAID ADDITION WOULD ALSO BE COVERED BY CLAUSE (I) INSERTED UNDER EXPLANATION - 1 OF SECTION 115JB AFTER THE DECISION OF THE HON'BLE APEX COURT GIVEN IN THE CASE OF APOLLO TYRES LTD. 255 ITR 273. HENCE, THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN ADDING BACK THE DEPRECIATION CLAIMED ON THE FACTORY BUILDING AND ON PLANT & MACHINERY. ACCORDINGLY, THE CONTENTIONS RAISED BY THE APPELLANT IN THIS REGARD ARE REJECTED.' ITA NO. 69 0 6 /20 1 3 4 17.1 ONCE THE ASSESSEE CLOSED THE FACTORY THEN THE DECISION OF THE ASSESSEE TO BOOK THE DEPRECIATION OF DISMANTLED ASSETS HAS TO BE DECIDED AS PER THE PROVISIONS OF COMPANIES ACT AS WELL AS AS - 6. THE FUNDAMENTAL PRINCIPLE FOR PROVIDING DEPRECATION ON ASSET IS DIMINUTION IN THE VALUE OF THE ASSETS DUE TO WEAR AND TEAR AS A RESULT OF USE OR RETAIN FOR BUSINESS OF THE ASSESSEE. THUS, UNDERLINE RULE FOR DEPRECIATION IS USE OR RETAIN OF ASSETS FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. WHEN THE ASSET HAS BEEN DISCARDED AND DISMANTLED, THEN IN THE ABSENCE OF PHYSICAL EXISTENCE OF THE USEFUL ASSETS, MERE RETENTION OF THE ASSETS IN THE BOOKS OF ACCOUNT WOULD NOT ENTITLED FOR ANY DEPRECIATION EVEN UNDER THE PROVISIONS OF COMPANIES ACT. 17.2 EVEN, AS PER AS - 6, THE DEPRECIATIO N HAS BEEN DEFINED AS MEASURE OF WEARING OUT, CONSUMPTION OR OTHER LOSS OF VALUE OF A DEPRECIABLE ASSET. THE SAID LOSS IS ARISING DUE TO USE, EFFLUX OF TIME OR OBSOLESCENCE THROUGH TECHNOLOGY AND MARKET CHANGES. THEREFORE, AS - 6 ALSO TALKS ABOUT THE ALLOCAT ION OF THE VALUE OF THE ASSET DURING THE EXPECTED USEFUL LIFE OF THE ASSET. WHEN THE ASSET IS NO MORE IN USE OR IN EXISTENCE, THEN THE DEPRECIATION IS NOT REQUIRED TO BE BOOKED. THEREFORE, PRIMA FACIE BOOKING THE DEPRECIATION ON THE ASSETS, WHICH HAVE ALRE ADY BEEN DISCARDED AND DISMANTLED, IS NOT AS PER THE PROVISIONS OF COMPANIES ACT OR AS PER AS - 6. THERE IS NO DOUBT THAT, IF THE ACCOUNTS ARE MAINTAINED AS PER THE COMPANIES ACT AND CERTIFICATED BY THE AUDITORS AND ACCEPTED OR APPROVED BY THE COMPANY IN THE ANNUAL GENERAL MEETING, THEN THE ASSESSING OFFICER CANNOT TINKER WITH THE ACCOUNTS FOR COMPUTING BOOK PROFIT U/S 115JB EXCEPT THE ADJUSTMENTS AS PROVIDED UNDER THE PROVISIONS ITSELF. HOWEVER, WHEN IT IS APPARENT AND MANIFEST FROM THE FACTS THAT THE ACCOUN TS AND PARTICULARLY ON THE POINT OF DEPRECATION ARE NOT AS PER PART 1I & III OF SCHEDULE VI RISHIROOP RUBBER INTERNATIONAL LTD OF THE COMPANIES ACT AS WELL AS AS - 6 THE SAID ILLEGALITY CANNOT BE ALLOWED IN THE GRAB OF LIMITED POWERS OF THE AO U/S 115JB. 17. 3 SUB.SEC. (2) OF SEC. 115JB MANDATES THAT EVERY ASSESSEE, BEING A COMPANY, SHALL FOR THE PURPOSES OF THIS SECTION PREPARE ITS P&L ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS II & III OF SCHEDULE VI TO THE COMPANIES A CT, 1956. WE QUOTE SUB.SEC. (2) OF SEC. 115JB AS UNDER: (2) EVERY ASSESSEE, BEING A COMPANY, SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS II AND III O F SCHEDULE VI22 TO THE COMPANIES ACT, 1956 (1 OF 1956) : PROVIDED THAT WHILE PREPARING THE ANNUAL ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT, -- (I) THE ACCOUNTING POLICIES; (II) THE ACCOUNTING STANDARDS ADOPTED FOR PREPARING SUCH ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT; (III) THE METHOD AND RATES ADOPTED FOR CALCULATING THE DEPRECIATION, SHALL BE THE SAME AS HAVE BEEN ADOPTED FOR THE PURPOSE OF PREPARING SUCH ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT AND LAID BEFORE THE COMPANY AT ITS ANNUAL GENERAL MEE TING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 210 OF THE COMPANIES ACT, 1956 (1 OF 1956) : ITA NO. 69 0 6 /20 1 3 5 PROVIDED FURTHER THAT WHERE THE COMPANY HAS ADOPTED OR ADOPTS THE FINANCIAL YEAR UNDER THE COMPANIES ACT, 1956 (1 OF 1956), WHICH IS DIFFERENT FROM THE PREVIOUS YEAR UNDER THIS ACT, -- (I) THE ACCOUNTING POLICIES; (II) THE ACCOUNTING STANDARDS ADOPTED FOR PREPARING SUCH ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT; (III) THE METHOD AND RATES ADOPTED FOR CALCULATING THE DEPRECIATION, SHALL CORRESPOND TO THE ACCOUNTING POLICIES, ACCOUNTING STANDARDS AND THE METHOD AND RATES FOR CALCULATING THE DEPRECIATION WHICH HAVE BEEN ADOPTED FOR PREPARING SUCH ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT FOR SUCH FINANCIAL YEAR OR PART OF SUCH FINANCIAL YEAR FALLING WITHIN THE RELEVA NT PREVIOUS YEAR. 17.4 IN COMPARISON TO SEC. 115J WHERE THE REQUIREMENT OF PREPARATION OF THE ACCOUNTS WAS LIMITED AS TO PREPARE IN ACCORDANCE WITH THE PROVISIONS OF PARTS II & III OF SCHEDULE VI OF THE COMPANIES ACT, THE REQUIREMENT U/S 11JB IS APART FRO M PREPARATION OF ACCOUNTS AS PER PART II & III OF SCHEDULE VI OF THE COMPANIES ACT ALSO REQUIRES THAT ACCOUNTING POLICIES AND ACCOUNTING STANDARD ETC., ADOPTED FOR PREPARING THE ACCOUNTS SHALL BE THE SAME AS PER THE ACCOUNTING STANDARD LAID DOWN BEFORE THE COMPANY IN ITS ANNUAL GENERAL MEETING. WHEN THERE IS AN APPARENT AND TOTAL DEPARTURE FROM THE ACCOUNTING STANDARDS AS WELL AS PROVISIONS OF COMPANIES ACT WHILE PREPARING THE ACCOUNTS INCLUDING P&L ACCOUNT, THEN IN THE MATTER OF TAXATION NOBODY ELSE THAN T HE ASSESSING OFFICER HAS THE POWER TO EXAMINE THE SAME UNDER THE PROVISIONS OF SEC. 115JB OF THE ACT. THIS VIEW OF OURS HAS BEEN FORTIFIED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF RAIN COMMODITIES LTD. V. DEPUTY COMMISSIONER OF I NCOME - TAX REPORTED IN 40 SOT 264 WHEREIN THE SPECIAL BENCH HAS HELD AS UNDER: 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND THE CASE LAWS RELIED UPON BY BOTH THE PARTIES. WE HAVE TAKEN INTO CONSIDERATION THE RA TIO DECIDED OF ALL THE DECISIONS RELIED UPON BY THE RIVAL PARTIES. THE OMISSION OF REFERENCE TO SOME OF THE CASES IN THE ORDER IS EITHER DUE TO THEIR IRRELEVANCE OR TO RELIEVE THE ORDER FROM THE REPETITIVE NATURE OF THE DECISIONS. UNDER MINIMUM ALTERNATE T AX (MAT) PROVISIONS, THE ASSESSING OFFICER IS CONCERNED WITH THE ADJUSTMENTS TO BE MADE WITH THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT. ONE OF THE MOOT QUESTION RELEVANCE TO THE ISSUE BEFORE US IS WHETHER THE ASSESSING OFFICER HAS POWER TO ALT ER THE NET PROFIT ? IN OUR CONSIDERED OPINION, YES. WE AGREE THAT IT IS SETTLED LAW THAT ASSESSING OFFICER HAS THE POWER TO ALTERNATE, THE NET PROFIT. IN THE FOLLOWING TWO CASES, THE ASSESSING OFFICER CAN REWRITE THE PROFIT AND LOSS ACCOUNT, I.E., TO SAY T HAT ASSESSING OFFICER SHOULD RECALCULATE THE NET PROFIT AND THEN FOLLOW THE ADJUSTMENTS OF MAT AS USUAL: (1) IF IT IS DISCOVERED THAT PROFIT AND LOSS ACCOUNT IS NOT DRAWN UP IN ACCORDANCE WITH PART II AND PART III OF SCHEDULE VI TO THE2 COMPANIES ACT. HOWE VER, THE ASSESSING OFFICER CANNOT DISTURB THE NET PROFIT AS SHOWN BY THE ASSESSEE WHERE THERE ARE NO SUCH ALLEGATIONS, FRAUD OR MISREPRESENTATION BUT ONLY A DIFFERENCE OF OPINION AS TO WHETHER A PARTICULAR AMOUNT SHOULD BE PROPERLY SHOWN IN THE PROFIT AND LOSS ACCOUNT RISHIROOP RUBBER INTERNATIONAL LTD OR IN THE BALANCE ITA NO. 69 0 6 /20 1 3 6 SHEET. (2) IF ACCOUNTING POLICIES, ACCOUNTING STANDARDS NOT ADOPTED FOR PREPARING SUCH ACCOUNTS AND METHOD, RATE OF DEPRECIATION WHICH HAVE BEEN INCORRECTLY ADOPTED FOR PREPARATION OF PROFIT AND 1059 ACCOUNT LAID BEFORE THE ANNUAL GENERAL MEETING. EXCEPT FOR THE ABOVE TWO CASES, THE ASSESSING OFFICER HAS NO POWER TO ALTER THE NET PROFIT SHOWN L THE COMPANIES FOR THE PURPOSE OF COMPUTING THE BOOK PROFIT. THUS, IT IS CLEAR THAT UNDER MAT, THE A SSESSING OFFICER SHOULD TAKE THE NET PROFIT AS COMPUTED BY THE ASSESSEE AND THEN MAKE T HE ADJUSTMENTS UNDER SECTION 11 5JB OF THE ACT. IT IS COMMON THAT SOME COMPANIES FOLLOW AN ACCOUNTING YEAR UNDER THE COMPANIES ACT, 1956 WHICH IS DIFFERENT FROM THE FINAN CIAL YEAR UNDER INCOME - TAX ACT, 1961. THESE COMPANIES GENERALLY PREPARE TWO SETS OF ACCOUNTS - ONE FOR COMPANIES ACT AND ANOTHER FOR INCOME - TAX ACT. THE REASON BEING DIFFERENT ACCOUNTING POLICIES, STANDARDS, DEPRECIATION METHODS AND RATES ARE ADOPTED IN TW O SETS OF ACCOUNT SO THAT HIGHER PROFIT IS REPORTED TO SHAREHOLDERS AND LOWER PROFIT FOR THE INCOME - TAX AUTHORITIES. TO CURB THE ABOVE PRACTICE ONLY THIS RECALCULATION OF NET PROFIT UNDER MAT WAS INCORPORATED SO THAT THERE SHOULD BE A CONSISTENCY IN ACCOUN TING POLICIES, STANDARDS, METHODS AND RATES OF DEPRECIATION WITHIN THE KNOWLEDGE OF INCOME - TAX AUTHORITIES.' THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT V. AKSHAY TRADING & AGENCIES (P.) LTD [2008] 304 ITR 401' THE QUESTION REFERRED TO THE HIG H COURT AND THE DECISION OF THE HIGH COURT, AS REPORTED ARE AS UNDER: C. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE INCOME - TAX APPELLATE TRIBUNAL WAS CORRECT IN UPHOLDING THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPE ALS) IN HOLDING THAT THE CAPITAL GAINS OF RS. 19,74,489 ARE NOT TO BE TAKEN INTO ACCOUNT WHILE COMPUTING THE PROFITS LIABLE TO BE TAXED UNDER SECTION 11 5JA OF THE INCOME - TAX ACT, 1961 AND THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN CIT V. VEEKAY LAL LNVESTMENT CO. (P.) LTD. 249 ITR 597 WAS NOT APPLICABLE? INSOFAR AS QUESTION NO. OUR ATTENTION IS INVITED TO THE JUDGMENT OF THE SUPREME COURT IN APOLLO TYRES LTD V. C1T255 ITR 273. THE QUESTION FRAMED THEREIN WHICH IS SIMILAR TO QUESTION NO. 'C' HAS B EEN ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE LIGHT OF THAT, THE QUESTION OF LAW AS FRAMED WOULD NOT ARISE.' FROM THE ABOVE, IT IS DIFFICULT TO CONCLUDE THAT THE DIVISION BENCH OF BOMBAY HIGH COURT IN THIS CASE HAS OVERRULED THE DE CISION OF ANOTHER DIVISION BENCH WITHOUT EVEN A LINE OF DISCUSSION. THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF VEEKAYLAL INVESTMENT CO. (P.) LTD. (SUPRA) HOLDING THAT THE BOOK PROFITS HAVE TO BE COMPUTED IN ACCORDANCE WITH PARTS II AND IF OF SCHE DULE VI TO THE COMPANIES ACT. THIS IS IN LINE WITH THE DECISION OF THE APEX COURT IN THE CASE OF APOLLO TYRES LTD. (SUPRA). THE MUMBAI HIGH COURT IN THE CASE OF AKSHAY TEXTILES TRADING & AGENCIES (P.) LTD. (SUPRA) HAS HELD THAT THERE IS NO QUESTION OF LAW IN VIEW OF THE DECISION OF THE APEX COURT IN THE CASE OF APOLLO TYRES LTD. (SUPRA). FROM THIS WE ARE NOT ABLE TO INFER THAT THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF ITA NO. 69 0 6 /20 1 3 7 VEEKAYLAL INVESTMENT CO. (P.) LTD. (SUPRA), IS NO LONGER GOOD IN LAW. THEREFORE , THIS CASE DOES NOT HELP THE ASSESSEE. 17.5 A SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS BOMBAY DIAMOND REPORTED IN 33 DTR MUM(TRIB) 59 VIDE ORDER DATED 30.11.2009. 17.6 IT IS CLEAR FROM THE ABOVE DECISION THAT THE ASSESSING OFFICER HAS POWER TO EXAMINE WHETHER THE ACCOUNTS ARE MAINTAINED AS PER THE ACCOUNTING STANDARD AND POLICIES AS PROVIDED UNDER THE COMPANIES ACT. THE SPECIAL BENCH OF THE TRIBUNAL, AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME CO URT IN THE CASE OF APOLLO TYRES LTD. (SUPRA) AS WELL AS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF AKSHAY TEXTILES TRADING & AGENCIES (P.) LTD. REPORTED IN 304 ITR 401 & THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF VEEKAYL AL INVESTMENT CO. (P.) LTD. REPORTED IN 249 ITR 597 HAS TAKEN A VIEW THAT THE DECISION IN THE CASE OF VEEKAYLAL INVESTMENT CO. P. LTD. [SUPRA] HAS NOT BEEN OVERRULED BY THE DECISION IN THE CASE OF AKSHAY TEXTILE TRADING & AGENCIES PVT. [SUPRA]. ACCORDINGLY , WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. 6. AS THE FACTS AND CIRCUMSTANCES OF THE CASE DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN C ASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) DELETING DISALLOWANCE OF CLAIM OF DEPRECIATION. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08/05/ 201 5 . SD/ - SD/ - ( ) ( VIJAY PAL RAO ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/05 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / G UARD FILE. //TRUE COPY//