D.C.I.T Cir - 6,kolkata., Kolkata V. M/s Transafe Services Ltd, Kolkata

ITA 695/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4865 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN ACIT SRDR
• Keywords: Recovery proceedings; Depreciation; Corroborative evidences; Revised return; Revenue expenditure
• Section: 143(3); 115JB; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI N.V.VASUSDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 694 - 695 / KOL / 2013 ASSESSMENT YEARS : 2008-09 & 2009-10 DCIT, CIRCLE-6, ROOM NO. 17, 6 TH FLOOR, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-69 V/S . M/S TRANSAFE SERVICES LTD, 21, NETAJI SUBHAS ROAD, KOLKTA-700 001 [ PAN NO.AAACI 5531 R ] /APPELLANT .. / RESPONDENT C.O. NO.50 - 51/KOL/2013 (A/O ITA NO. 694-695/KOL/2013) ASSESSMENT YEARS : 2008-09 & 2009-10 M/S TRANSFE SERVICES LTD., 21, NETAJI SUBHAS ROAD, KOLKATA-700 001 [ PAN NO.AAACI 5531 R ] V/S . DCIT, CIRCLE-6, ROOM NO. 17, 6 TH FLOOR, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE,KOLKATA-69 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI N.K.PODDAR, SR-ADVOCATE SHRI A.K.TIBREWAL, FCA & SHRI AMIT AGARWAL, ADVOCATE /BY REVENUE SHRI SALLONG YADEN, ACIT, SR-DR /DATE OF HEARING 11-04-2016 ! /DATE OF PRONOUNCEMENT 11-05-2016 ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 2 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THESE TWO APPEALS AND TWO CROSS OBJECTION (CO) FIL ED BY REVENUE AND ASSESSEE ARE ARISING OUT OF ORDER OF COMMISSIONER O F INCOME TAX (APPEALS)- VI, KOLKATA. DATED 19.12.2012 & 20.12.2012. ASSESSM ENTS WERE FRAMED BY DCIT, CIRCLE-6 KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDERS DATED 31. 12.2010 AND 26.12.2010 FOR ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY. SHRI N.K.PODDAR, SHRI A.K. TIBREWAL AND SHRI AMIT A GARWAL LD. AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF OF ASSESSEE AND SHRI SALLONG YADEN, LD. DEPARTMENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 2. AT THE THRESHOLD, IT IS NOTED THAT THERE IS SMAL LNESS OF DELAY IN FILING OF BOTH THE APPEALS BY THE REVENUE. THE REVENUE HAS FI LED AFFIDAVITS IN THIS REGARD STATING THE REASONS THAT THE DELAY IS OCCURR ED DUE TO APPROVAL FOR FILING OF SECOND APPEAL RECEIVED FOLLOWED WITH WEEKLY HOLI DAYS. LD. AR FOR ASSESSEE SUBMITTED THAT CONSIDERING THE DELAY THEY SHOULD NO T BE HAVING ANY OBJECTION TO THE BENCH FOR CONSIDERING THE DELAY OF CONDONATI ON. THUS, IN OUR CONSIDERED OPINION, ON THE FACTS AND CIRCUMSTANCES, I.E. IN TH IS CASE DESERVES TO BE CONSIDERED AND SAME IS CONDONED. WE ADMIT TO HEARIN G BOTH THE APPEALS. 3. BEFORE CARVING OUT THE SPECIFIC ISSUE OF THE CAS E LET US UNDERSTAND THE BRIEF HISTORY OF THE CASE. THE ASSESSEE IN THE PRES ENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF TRANSPORTATI ON OF GOODS AND SERVICES WITH CONTAINERS BASED LOGISTICS, MANUFACTU RER OF SPECIALTY CONTAINERS, AND LEASING OF CONTAINERS. FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10, THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME DE CLARING THE PROFITS WHICH WAS DULY SIGNED BY THE CHARTERED ACCOUNTANT AND APPROVE D IN THE AGM OF THE COMPANY. THE DIRECTORS OF THE COMPANY RECEIVED SEVE RAL ANONYMOUS ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 3 COMPLAINTS ABOUT THE FINANCIAL IRREGULARITIES OF TH E COMPANY, SO THIS ISSUE WAS DISCUSSED IN THE 105 TH MEETING OF THE BOARD OF DIRECTORS HELD ON DATED 19 TH MAY 2009. ACCORDINGLY THE BOARD OF DIRECTORS OF THE ASSESSEE COMPANY ENGAGED M/S KPMG MUMBAI TO CARRY OUT FINANCIAL AND TAX DUE DILIGENCE OF THE ASSESSEE COMPANY TO FIND OUT THE FINANCIAL IRREGULA RITIES. KPMG SUBMITTED ITS REPORT IN VARIOUS PARTS IN THE FORM OF DRAFT REPORT BUT THE FINAL REPORT WAS SUBMITTED ON 30-04-2010 REGARDING THE FINANCIAL IRR EGULARITIES WHICH CAN BE CAN BE SUMMARIZED AS UNDER : 1) NET OVER STATEMENT OF INCOME IN AY 2007-08 3,59,80,877.00 2) NET OVER STATEMENT OF INCOME IN AY 2008-09 17,50 ,97,762.00 LESS INCOME OMITTED TO BOOK 3,41,45,190.00 IN THE AY 2008-09. SO FINAL EFFECT IS 14, 09,52,572.00 3) NET OVER STATEMENT OF INCOME IN AY 2009-10 7,2 6,92,711.00 IT IS IMPORTANT TO NOTE THAT THE NECESSARY DETAILS OF THE OVERSTATEMENT OF INCOME WAS DULY RECORDED IN THE LD. CIT(A) ORDER. BASED ON THE REPORT OF KPMG, THE ASSESSEE TOOK NECE SSARY STEPS AGAINST THE PERSONS WHO WERE INVOLVED IN THE FINANCIAL IRREGULA RITIES BY FILING THE POLICE COMPLAINTS. AS PER THE REPORT THE HIGHER AMOUNT OF PROFIT WAS DECLARED IN THE AYS 2007-08, 2008-09 AND 2009-10 BY WAY OF FRAUDULE NT AND FALSIFYING ENTRIES IN THE BOOKS OF ACCOUNTS. HOWEVER AS THE TIME FOR R EVISING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR WAS PASSED FOR THE A Y 2007-08, NO RECTIFICATION WAS MADE. HOWEVER FOR THE ASSESSMENT YEARS 2008-09 AND 2009- 10, THE ASSESSEE FILED THE REVISED RETURN OF INCOME BASED ON THE REPORT OF KPMG AFTER GIVING EFFECT THE FINANCIAL IRREGULARITI ES IN THE FINANCIAL STATEMENT OF THE COMPANY. AS A RESULT THE ASSESSEE FILED THE REV ISED RETURN OF INCOME DECLARING THE LOSS FOR BOTH AFORESAID ASSESSMENT YE ARS. HOWEVER THE ASSESSEE DID NOT GIVE EFFECT OF FINANCIAL IRREGULAR ITIES PERTAINING TO THE AYS 2007-08, 2008-09 & 2009-10 IN THE BOOKS OF ACCOUNTS . IT IS IMPORTANT TO NOTE THAT FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSMEN T WAS FRAMED U/S 143(3) ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 4 OF THE ACT BUT THE SAME CANNOT BE RECTIFIED AS THER E IS NO PROVISION UNDER THE INCOME TAX LAW. 3.1 FOR ALL THE FINANCIAL IRREGULARITIES AS NOTED B Y THE ASSESSEE FOR THE THREE YEARS, EFFECT IN THE BOOKS OF ACCOUNTS WAS GIVEN IN THE FINANCIAL YEAR 2009-10 CORRESPONDING TO THE ASSESSMENT YEAR 2010-11 BECAUS E THE ASSESSEE RECEIVED THE FINAL REPORT FROM KPMG ON 30-04-2010. HOWEVER THE EFFECT OF ALL THE FINANCIAL IRREGULARITIES WERE CHARGED IN THE PR OFIT AND LOSS ACCOUNT UNDER THE HEADING PRIOR PERIOD ADJUSTMENT IN THE BOOKS OF ACCOUNTS AND THE SAME WAS DULY ADDED BACK IN FILING THE INCOME TAX RETURN OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11. 3.2 HOWEVER THE AO WHILE FRAMING THE ASSESSMENT FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 DISREGARDED THE DEDUCTION CLAIMED IN THE REVISED RETURN ON THE FOLLOWING GROUNDS : 1. LOSSES ON ACCOUNT OF EMBEZZLEMENT ARE ADMISSIBLE ONLY IN THE YEAR IN WHICH SUCH LOSS WAS DETECTED AND THE AMOUNT CRYSTAL LIZED ON THE BASIS OF THE FINAL REPORT SUBMITTED BY THE DETECTIVE AGEN CY. 2. THE CLAIM OF THE ASSESSEE IS BASED ON THE LIMITE D FINDING OF THE INVESTIGATION REPORT OF KPMG AND IT DOES NOT GIVE T HE MODUS OPERANDI OF THE EMBEZZLEMENT. 3. THE MATTER IS SUB-JUDICE AND HAS NOT REACHED TO ITS FINALITY. 4. IT IS NOT CLEAR WHETHER ANY RECOVERY PROCEEDINGS HAD BEEN FILED AGAINST THE ACCUSED PERSONS. 5. THE ASSESSEE CLAIMED THE DEDUCTION OF FINANCIAL IRREGULARITIES IN THE REVISED RETURN OF INCOME WITHOUT INCORPORATING THE SAME IN THE BOOKS OF ACCOUNTS. 6. THE REVISED RETURN OF INCOME HAS NO LEGAL BASIS AND THEREFORE NOT ACCEPTABLE FOR THE INCOME TAX PURPOSES. NOW COMING TO THE SPECIFIC ISSUE OF THE CASE FOR TH E REVENUES APPEAL IN ITA NUMBER 694/KOL/2013 4. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL:- ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 5 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN LAW BY DELETING THE ADDITION MADE ON CLAIM OF LOSS WHEN THE SAME IS NOT SUPPORTED BY ANY AUDITED ACCOUNTS 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) ERRED IN LAW IN DELETING THE ADDITION MADE BY AO IN RESPECT DEPRECIATION CLAIMED IN THE REVISED RETURN THE DATA OF WHICH IS NOT SUPPORTED W ITH ANY AUDIT REPORT. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) ERRED IN LAW IN LAW IN DELETING THE ADDITION MADE BY AO IN R ESPECT PROVISIONS WRITTEN BACK WHEN NO SUPPORTING EVIDENCE COULD BE PROVIDED BY THE APPELLANT THAT SUCH PROVISIONS WERE DISALLOWED IN EARLIER YEARS. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) ERRED IN LAW IN HOLDING THAT THE EXPENDITURE ON DEBIT CARDS BE TREATED AS REVENUE EXPENDITURE. 5. THE 1 ST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO FOR RS.14,09,52,57 2/- FOR CLAIMING THE LOSS WITHOUT THE SUPPORT OF AUDITED ACCOUNTS. THE ASSESSEE HAS CLAIMED LOSS OF RS.17,41,28,073/- IN THE REVISED RETURN OF INCOME WHICH AROSE FROM THE FINANCIAL IRREGULARITIE S FOUND BY THE KPMG IN THE INVESTIGATION REPORT. HOWEVER THE AO HAS DISREGARDE D THE CLAIM OF THE ASSESSEE ON ACCOUNT OF FOLLOWING REASONS. 1. THE LOSSES ARE CLAIMED BY THE ASSESSEE ON THE IN VESTIGATION REPORT CARRIED OUT BY KPMG WHICH WAS NOT BASED ON THE INDE PENDENT AUDIT FINDINGS OR REVIEW OF FINANCIAL STATEMENTS BUT IT W AS BASED ON THE INFORMATION SHARED BY THE MANAGEMENT. 2. THE DISPUTE REGARDING FINANCIAL IRREGULARITIES I S PENDING FOR INVESTIGATION BY JUDICIAL AUTHORITY AND NOT REACHED TO ITS FINALI TY. IN VIEW OF THE ABOVE, THE AO DID NOT ACCEPT THE CLA IM OF LOSS CLAIM IN THE REVISED RETURN OF INCOME AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. 6. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD CIT (A) WHERE IT SUBMITTED BY THE ASSESSEE THAT THE AO HAS NOT POINT ED OUT ANY OMISSION OR ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 6 ERROR IN THE DOCUMENTS AND EXPLANATION FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE PROFIT OF THE COMPANY WAS UNNECESSARY INFLATED BY SHOWING MORE INCOME AND THI S FACT HAS BEEN DULY INVESTIGATED BY KPMG AFTER EXAMINATION THE FINANCIA L IRREGULARITIES, MISCONDUCT AND FALSIFICATION IN THE BOOKS OF ACCOUN TS. THERE WAS NO EMBEZZLEMENT OF CASH OR MONEY BUT ONLY THE INCOME W AS OVER STATED BY WAY OF FALSIFICATION OF BOOK ENTRIES. THE LEARNED CIT(A ) ACCORDINGLY AND AFTER CONSIDERING THE AFORESAID FACTS OF THE CASE HELD TH AT THE LOSS CLAIMED BY THE ASSESSEE IS TO BE ALLOWED UNDER THE NORMAL PROVISIO N OF INCOME TAX ACT. HOWEVER REGARDING THE INCOME UNDER MINIMUM ALTERNAT E TAX (MAT) PROVISIONS / SECTION 115JB OF THE ACT THE LD. CIT(A ) HELD THAT THE PROFIT AS DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME WILL BE CONSIDERED. THE PROFIT DECLARED IN THE ORIGINAL RETURN FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 HAVE BEEN APPROVED IN THE AGM OF THE CO MPANY WHICH IS AS PER THE REQUIREMENT OF THE SECTION 115JB OF THE ACT. TH E BOOK PROFIT DECLARED IN THE REVISED RETURN CANNOT BE ACCEPTED AS IT DOES NO T FULFILL THE CONDITIONS ENUMERATED UNDER SECTION 115JB OF THE ACT. BEING AGGRIEVED BY THIS ORDER OF THE ORDER OF LD CI T(A) REVENUE IS IN APPEAL 7. BEFORE US BOTH THE PARTIES RELIED ON THE ORDERS OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. THE LD. AR BEFORE US HAS FILED A PAPER BOOK WHICH RUNNING FROM PAGES 1 TO 979. WE HAVE HEARD THE RIVA L PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE CASE IN HAN D, WE FIND THAT THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME DECLAR ING THE TAXABLE PROFIT BUT ON A LATER DATE OBSERVED SEVERAL FINANCIAL IRREGULARIT IES REGARDING THE ACTUAL INCOME ON THE BASIS OF INVESTIGATION REPORT PREPARE D BY KPMG. ACCORDINGLY THE ASSESSEE REVISED THE RETURN OF INCOME DECLARING THE LOSS BUT WITHOUT GIVING EFFECT OF THOSE FINANCIAL IRREGULARITIES IN THE BOO KS OF ACCOUNTS. THEREFORE, THE AO DECLINED TO ACCEPT THE PLEA OF THE ASSESSEE ON T HE GROUND THAT THE FINANCIAL IRREGULARITIES ARE PENDING IN THE COURT O F LAW AND HAS NOT REACHED TO ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 7 ITS FINALITY. HOWEVER, AT THE APPELLATE STAGE LD CI T(A) GRANTED THE RELIEF TO THE ASSESSEE BY OBSERVING THAT THE AO HAS NOT BROUGHT O N RECORD ANY DEFECTS AND DEFICIENCIES IN THE INVESTIGATION REPORT SUBMITTED BY THE ASSESSEE IN THE REVISED RETURN FILED BY THE ASSESSEE. THE LD. CIT(A ) ALSO OBSERVED THAT THE AO HAS CONSIDERED THE REVISED RETURN AS HE STARTED COMPUTING THE INCOME IN HIS ASSESSMENT ORDER WITH THE AMOUNT OF LOSS DECLAR ED IN THE REVISED RETURN BUT DID NOT ALLOW THE LOSSES CLAIMED IN THE REVISED RETURN. NOW THE QUESTION BEFORE US IS AS TO WHETHER THE LOSSES CLAIMED BY TH E ASSESSEE IN THE REVISED RETURN OF INCOME DUE TO FINANCIAL IRREGULARITIES HA VING IMPACTED THE PROFITABILITY AND WHICH IS NOT THE REAL PROFIT CAN BE ALLOWED AS DEDUCTION. IN THIS CONNECTION, WE RELY IN THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CIT VS. LAKSHMI MACHINE WORKS (2007) 290 ITR 667 (SC) OBSERVED AS UNDER:- . IT IS IMPORTANT TO NOTE THAT TAX UNDER THE ACT IS UPON INCOME, PROFITS AND GAINS. IT IS NOT A TAX ON GROSS RECEIPTS. UNDER SEC TION 2(24) OF THE ACT THE WORD INCOME INCLUDES PROFITS AND GAINS. THE CHARGE IS NOT ON GROSS RECEIPTS BUT ON PROFITS AND GAINS PROPERLY SO-CALLED. GROSS RECE IPTS OR SALE PROCEEDS, HOWEVER, INCLUDE PROFITS. ACCORDING TO THE LAW AND PRACTICE OF INCOME TAX BY KANGA AND PALKHIVALA, THE WORD PROFITS IN SECTION 28 SHOULD BE UNDERSTOOD IN NORMAL AND PROPER SENSE. HOWEVER, SUBJECT TO SPE CIAL REQUIREMENTS OF THE INCOME-TAX, PROFITS HAVE GOT TO BE ASSESSED PROVIDE D THEY ARE REAL PROFITS. SUCH PROFITS HAVE GOT TO BE ASCERTAINED ON ORDINARY PRINCIPLES OF COMMERCIAL TRADING AND ACCOUNTING. HOWEVER, THE INCOME-TAX ACT HAS LAID DOWN CERTAIN RULES TO BE APPLIED IN DECIDING HOW THE TAX SHOULD BE ASSESSED AND EVEN IF THE RESULTS IS TO TAX AS PROFITS WHAT CANNOT BE CONSTRU ED AS PROFITS, STILL THE REQUIREMENT OF THE INCOME-TAX ACT MUST BE COMPLIED WITH. WHERE A DEDUCTION IS NECESSARY IN ORDER TO ASCERTAIN THE PROFITS AND GAINS, SUCH DEDUCTIONS SHOULD BE ALLOWED. PROFITS SHOULD BE COMPUTED AFTER DEDUCTING THE EXPENSES INCURRED FOR BUSINESS THOUGH SUCH EXPENSES MAY NOT BE ADMISSIBLE EXPRESSLY UNDER THE ACT, UNLESS SUCH EXPENSES ARE EXPRESSLY D ISALLOWED BY THE ACT [SEE : PAGE 455 OF THE LAW AND PRACTICE OF INCOME TAX BY KANGA AND PALKHIVALA] FROM THE AFORESAID DECISION OF HONBLE SUPREME COUR T IN THE CASE OF LAKSHMI MACHINE WORKS (SUPRA) WE FIND THAT INCOME TAX SHOULD BE LEVIED ON THE REAL PROFITS. THE REAL PROFIT SHOULD BE WORKED OUT ON TH E BASIS OF ACCOUNTING PRINCIPLES AND IN THE ORDINARY COURSE OF COMMERCIAL TRADING. THE ACCOUNTING ENTRIES MADE IN THE BOOKS OF ACCOUNTS WHICH ARE NOT IN THE CONFORMITY WITH ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 8 ACCOUNTANCY PRINCIPLES CANNOT BE REGARDED AS CONCLU SIVE EVIDENCE WITH REGARD TO THE ACTUAL PROFIT OR LOSS OF THE COMPANY. WHAT IS NECESSARY TO CONSIDER IS THE TRUE NATURE OF TRANSACTION WHETHER RESULTING IN PROFIT OR LOSS. IN THE INSTANT CASE, WE FIND THAT THERE WERE SEVERAL F INANCIAL IRREGULARITIES AS REPORTED BY KPMG BUT THE AO REJECTED THE SAME INSTE AD OF VERIFYING THE GENUINENESS OF THE REPORT BY HOLDING THAT THE MATTE R IS PENDING IN THE COURT OF LAW. IN OUR CONSIDERED VIEW THE REAL INCOME SHOULD BE BROUGHT TO TAX AND THE AO SHOULD NOT MERELY RELY ON THE DATA SUBMITTED BY THE ASSESSEE. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT (A). HENCE THIS GROUND OF REVENUES APPEAL IS DISMISSED. 8. THE 2 ND ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO FOR RS. 8,46,66 2/- ON ACCOUNT OF EXCESS DEPRECIATION CLAIMED IN THE REVISED RETURN OF INCOM E. 8.1 THE ASSESSEE CLAIMED DEPRECIATION OF RS.14,16,8 7,484.00 IN THE ORIGINAL RETURN OF INCOME WHICH WAS SUPPORTED BY TH E TAX AUDIT REPORT. HOWEVER THE ASSESSEE CLAIMED THE DEPRECIATION OF RS . 14,25,34,146.00 IN THE REVISED RETURN OF INCOME BUT THE SAME WAS NOT SUPPO RTED WITH THE TAX AUDIT REPORT. THEREFORE THE AO DISALLOWED THE EXCESS DEP RECIATION OF RUPEES 8,46,662.00 BEING THE DIFFERENCE IN THE ORIGINAL RE TURN OF INCOME AND REVISED RETURN OF INCOME AND ADDED TO THE TOTAL INCOME OF T HE ASSESSEE. 9. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD CI T(A) WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 24. I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APE. TH E APPELLANT HAS FILED THE DETAILS WHICH HAVE NOT BEEN EXAMINED BY THE ASSESSI NG OFFICER. THE REVISED CLAIM IS NOT SUPPORTED BY TAX AUDIT REPORT BUT THE APPELLANT HAS FILED THE FULL DETAILS AND IN REVISED RETURN HAS BEEN FILED, THE A SSESSING OFFICER IS REQUIRED TO CONSIDER THE REVISED CLAIM OF THE DEPRECIATION F ILED BY THE APPELLANT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO VER IFY THE REVISED CLAIM OF THE DEPRECIATION ON COMMERCIAL VEHICLES @ 30% AMOUNTING TO RS.8,46,662/- IN ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 9 THE NORMAL PROFIT/LOSS DETERMINATION AND IN CASE OF ANY VARIATION HE WILL PASS A SPEAKING ORDER ON THE SAME. BEING AGGRIEVED BY THIS ORDER OF THE ORDER OF LD CI T(A) REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US BOTH THE PARTIES REL IED ON THE ORDERS OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. AT THE OUT SET WE OBSERVE THAT THE AO DISALLOWED THE EXCESS DEPRECIATION CLAIMED BY THE A SSESSEE IN THE REVISED RETURN OF INCOME ON THE GROUND THAT THE REVISED RET URN OF INCOME WAS NOT SUPPORTED WITH THE TAX AUDIT REPORT. HOWEVER, WE F URTHER FIND THAT THE AO DID NOT POINT OUT ANY DEFECT IN THE WORKING OF EXCESS D EPRECIATION CLAIMED BY THE ASSESSEE. NOW IN OUR VIEW, IT IS NOT APPROPRIATE ON THE PART OF THE AO TO DISALLOW THE EXCESS DEPRECIATION WITHOUT GIVING ANY FINDINGS IN THE CLAIM OF THE ASSESSEE. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE LD CIT(A) AND WE UPHOLD ACCORDINGLY. HENCE, THIS GROUND OF REVENU ES APPEAL IS DISMISSED. 11. THE 3 RD ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO ON ACCOU NT OF PROVISIONS WRITTEN BACK WITHOUT HAVING THE SUPPORTING EVIDENCE. 12. THE ASSESSEE HAS CLAIMED IN THE COMPUTATION OF INCOME A DEDUCTION OF RS.28,56,345/- ON ACCOUNT OF PROVISION WRITTEN BACK BUT COULD NOT SUBSTANTIATE THE SAME BY PRODUCING THE SUPPORTING EVIDENCE AT TH E TIME OF ASSESSMENT. THEREFORE, THE AO REJECTED THE CLAIM OF THE ASSESSE E AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE. 13. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD C IT(A) WHO DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER:- 28. THE ASSESSING OFFICER HAS DISALLOWED THE WRITIN G OF PROVISION BACK BECAUSE OF FRAUD AND FICTITIOUS ENTRIES UNEARTHED I N THE BOOKS OF THIS ASSESSMENT YEAR. THE PROVISIONS WHICH WERE CREATED HAVE BEEN WRITTEN BACK AS PER THE DETAILS GIVEN N THE REMAND REPORT. THE S TAND OF THE ASSESSING ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 10 OFFICER THAT THE PROVISIONS WRITTEN BACK ARE NOT TO BE ALLOWED AS DEDUCTION IS NOT TENABLE. THE APPELLANT IS ENTITLED TO DEDUCT TH E PROVISION WRITTEN BACK IN THE COMPUTATION OF INCOME. THEREFORE, THE CLAIM OF THE APPELLANT IS ALLOWED AND THE ADDITION MADE BY THE ASSESSING OFFICER RS.2 8,56,345/- IN THE PROFIT/LOSS DETERMINATION IS DELETED. BEING AGGRIEVED BY THIS ORDER OF LD CIT(A) REVENUE IS IN APPEAL BEFORE US. 14. AT THE OUTSET, IT WAS OBSERVED FROM THE REMAND REPORT OF THE AO THAT IN THE EARLIER YEARS THE PROVISIONS WERE DISALLOWED BY THE ASSESSEE IN THE COMPUTATION OF INCOME. ACCORDINGLY, IN OUR VIEW, TH E PROVISION WRITTEN BACK SHOULD BE ALLOWED AS DEDUCTION FROM THE TOTAL INCOM E OF THE ASSESSEE. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF LD C IT(A). HENCE, THIS GROUND OF REVENUE IS DISMISSED. 15. THE 4 TH ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN HOLDING THE EXPENDITURE INCURRED ON DEBIT CARD AS REVENUE EXPENDITURE. 16. AT THE OUTSET, WE FIND NO SUCH ISSUE EMANATING EITHER FROM THE ORDER OF LD CIT(A) OR FROM THE ORDER OF ASSESSING OFFICER. B UT REVENUE CAME WITH THIS ISSUE FIRST TIME BEFORE US WE HOLD IT INFRUCTUS AND DOES NOT REQUIRE ANY ADJUDICATION. 17. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ITA NO.695/KOL/2013 AY 09-10. 18. REVENUE HAS RAISED FOLLOWING EFFECTIVE GROUNDS: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN LAW BY DELETING THE ADDITION MADE ON CLAIM OF LOSS WHEN THE SAME IS NOT SUPPORTED BY ANY AUDITED ACCOUNTS. 2. WHETHER ON THE FACT AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) ERRED IN LAW IN DELETING THE ADDITION MADE BY AO IN RESPECT PROV ISIONS WRITTEN BACK WHEN NO SUPPORTING EVIDENCE COULD BE PROVIDED BY THE APP ELLANT THAT SUCH PROVISIONS WERE DISALLOWED IN EARLIER YEARS. ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 11 19. THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS FOR AY 2008-09 EXCEPT THE AMOUNT INVOLVED AND THE S ECTION UNDER WHICH THE ORDER HAS BEEN PASSED. AS THE REST OF THE FACTS AND CIRCUMSTANCES ARE SIMILAR FOLLOWING OUR ORDER FOR AY 2008-09 IN PARA 5 TO 7 AND 12 TO 14 OF THIS ORDER WE DECIDED THE EFFECTIVE GROUNDS OF APPEAL FOR UNDE R APPEAL AGAINST THE REVENUE. 20. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ASSESSEES COS NO. 50/KOL/2013 FOR A.Y. 0 8-09. 21. ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROUNDS :- 1. THAT THE LEARNED CIT(A) HAS CORRECTLY ALLOWED D EDUCTION OF RS.28,56,345 UNDER THE HEADING PROVISION WRITTEN BACK AS THE RESPECTIVE PROVISIONS MADE IN THE EARLIER YEARS WERE NEVER ALLOWED AS A B USINESS DEDUCTION TO THE ASSESSEE COMPANY IN ANY OF THE YEARS WHATSOEVER.. 2. THAT THE LEARNED CIT(A) HAS RIGHTLY ALLOWED DEPR ECIATION IN THE SUM RS.8,46,662, WHICH WAS CLAIMED BY THE ASSESSEE COMP ANY IN ITS REVISED RETURN FILED ON 30 TH MARCH 2010.. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS), CIRCLE-6, KOLKATA ERRED IN APPLYING SECTION 115JB WHILE ALLOWING THE LOSSES CLAIMED UNDER NORMAL COMPUTATION OF THE INCOME TAX ACT BASED ON R ESULT OF BOOKS OF ACCOUNTS AND ADDITIONAL DOCUMENTS FILED AT THE TIME OF FILING REVISED RETURN. 4. THAT THE LEARNED CIT(A) ERRED IN IGNORING THE RE SULT OF FRAUDULENT / FICTITIOUS ENTRIES WHILE APPLYING SECTION 115JB, IN SO FAR AS THESE AFFECTED THE TAXABLE INCOME FOR THE ASSESSMENT YEAR 2008-09 MERELY BECAU SE THE ACCOUNTING ENTRIES RECTIFYING / MODIFYING THE EFFECT OF SUCH F RAUDULENT / FICTITIOUS ENTRIES WERE MADE BY THE ASSESSEE COMPANY IN THE FINANCIAL YEAR ENDING 31 ST MARCH, 2008 CORRESPONDING TO THE ASSESSMENT YEAR 2008-09. 5. THAT THE LEARNED CIT(A) ERRED IN ARBITRARILY APP LYING SECTION 115JB WHILE IGNORING THE REVISED RETURN FILED BY THE ASSESSEE C OMPANY ON 30 TH MARCH, 2010 FOR THE ASSESSMENT YEAR 2008-09, READ WITH THE LETTER DATED 2D DECEMBER, 2010 ADDRESSED TO DCIT, CIRCLE-6, KOLKATA IN COURSE OF THE IMPUGNED ASSESSMENT PROCEEDINGS, PARTICULARLY IN SO FAR AS IT RELATED TO THE RECTIFICATION / MODIFICATION OF THE ASSESSABLE INCO ME, ARISING WHOLLY ON ACCOUNT OF FRAUDULENT / FICTITIOUS ENTRIES BASED UPON NON- EXISTENT TRANSACTIONS RECORDED BY THE SENIOR MANAGERIAL PERSONNEL DURING THE THREE FINANCIAL YEARS ENDING 31 ST MARCH, 2007 31STMACH, 2008 & 31 ST MARCH, 2009 CORRESPONDING TO THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10. 6. THE ASSESSEE COMPANY HAS NOT INCURRED ANY EXPEND ITURE ON DEBIT CARDS DURING THE ASSESSMENT YEAR AND HENCE THE QUESTION O F THE LEARNED CIT(A) ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 12 TREATING THE SAME AS REVENUE EXPENDITURE DOES NOT A RISE. HENCE THIS GROUND IS ABSOLUTELY INFRUCTUOUS. 22. AT THE OUTSET IT WAS OBSERVED THAT GROUND NO. 1 AND 2 IN THE CO OF ASSESSEE WERE SUPPORTING THE ORDER OF LD. CIT(A) AN D WE HAVE ALREADY UPHELD THE ORDER OF LD.CIT(A) THEREFORE, THE SAME B ECOME INFRUCTUS. 23. THE COMMON ISSUE RAISED BY THE ASSESSEE IN GROU ND NO. 3 TO 5 IN THIS CO IS THAT LEARNED CIT(A) ERRED IN HOLDING THE PROF IT DECLARED IN THE ORIGINAL RETURN OF INCOME AS BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB OF THE ACT. 24. THE ASSESSEE CAME BEFORE US BY WAY OF THIS CO H AS CHALLENGED THE ORDER OF THE LD CIT(A) BY STATING THAT THE BOOK PRO FIT DECLARED IN THE ORIGINAL RETURN SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF MAT AS THAT PROFIT WAS THE RESULT OF FRAUDULENT/FICTITIOUS ENTRIES SHOWN IN TH E BOOKS OF ACCOUNTS. IN ACTUAL THERE WAS LOSS UNDER THE NORMAL PROVISIONS OF THE A CT BUT THE EFFECT OF FRAUDULENT ENTRIES WERE NOT RECTIFIED IN THE YEAR U NDER CONSIDERATION AS THE FINAL REPORT OF KPMG WAS RECEIVED ON 30-4.2010 BUT WAS MADE IN THE FINANCIAL YEAR 2009-10 CORRESPONDING TO THE ASSESSMENT YEAR 2 010-11. THE LD. CIT(A) SHOULD HAVE ACCEPTED THE BOOK PROFIT AS PER THE REV ISED RETURN OF INCOME. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDER OF LD . CIT(A). 25. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, MATER IAL ON RECORDS AND CASE LAWS RELIED UPON BY THE PARTIES. WE HAVE OBSERVED T HAT SECTION 115JB STARTS WITH NON-OBSTANTE CLAUSE THAT NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT WHICH MEANS THAT THI S SECTION HAS AN OVERRIDING EFFECT UPON THE OTHER PROVISIONS OF THE ACT AND BEF ORE WE PROCEED IT IS IMPORTANT TO SEE THE RELEVANT CLAUSES OF SECTION 11 5JB OF THE ACT WHICH READS AS UNDER: SPECIAL PROVISION FOR PAYMENT OF TAX BY CERTAIN CO MPANIES. 115JB (1) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, WHERE IN THE CASE OF AN ASSESSEE, BEING A COMPANY, THE ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 13 INCOME-TAX, PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR COMMENCING ON OR AFTER THE 1STD DAY OF APRIL, 2012, IS LESS THAN EIGHTEEN AND ONE-HALF PER CENT OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AN D THE TAD PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE THE A MOUNT OF INCOME- TAX AT THE RATE OF EIGHTEEN AND ONE-HALF PERCENT. (2) EVERY ASSESSEE,- (A) BEING A COMPANY, OTHER THAN A COMPANY REFERRED TO IN CLAUSE (B), SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE IT S PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANC E WITH THE PROVISIONS OF PART II OF SCHEDULE VI TO THE COMPANI ES ACT, 1956 (1 TO 1956); OR (B) BEING A COMPANY, TO WHICH THE PROVISO TO SUB-SE CTION (2) OF SECTION 211 OF THE COMPANIES ACT, 1956 (1 TO 1956) IS APPLI CABLE, SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS PROFIT AN D LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE P ROVISIONS OF THE ACT GOVERNING SUCH COMPANY: 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 PURP OSE OF PREPARING SUCH ACCOUNTS INCLUDING PROFIT AND LOSS ACCOUNT AND LAID BEFORE THE COMPANY AT ITS ANNUAL GENERAL MEETING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 210 OF THE COMPANIES ACT, 195 6 (1 OF 1956): 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, ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 14 SHALL CORRESPOND TO THE ACCOUNTING POLICIES, ACCOUN TING STANDARDS AND THE METHOD AND RATES FOR CALCULATING THE DEPRECIATI ON WHICH HAVE BEEN ADOPTED FOR PREPARING SUCH ACCOUNTS INCLUDING PROFI T AND LOSS ACCOUNT FOR SUCH FINANCIAL YEAR OR PART OF SUCH FINANCIAL Y EAR FALLING WITHIN THE RELEVANT PREVIOUS YEAR. EXPLANATION 1,- FOR THE PURPOSES OF THIS SECTION, BOOK PROFIT MEANS THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR PREPARED UNDER SUB-SECTION (2), AS IN CREASED BY (A) TO (E)** ** ** (F) THE AMOUNT OR AMOUNTS OF EXPENDITURE RELATABLE TO ANY INCOME TO WHICH SECTION 10 (OTHER THAN THE PROVISION CONTAINE D IN CLAUSE (38) THEREOF) OR SECTION 11 OR SECTION 12 APPLY; OR ** ** ** IF ANY AMOUNT REFERRED TO IN CLAUSES (A) TO (I) IS DEBITED TO THE PROFIT AND LOSS ACCOUNT OR IF ANY AMOUNT REFERRED TO IN CLAUSE (J) IS NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT, AND AS REDUCED BY,- ** ** ** 25.1 WE HAVE OBSERVED HAT SECTION 115JB OF THE ACT STARTS WITH NON- OBSTANTE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION IN THIS ACT, MEANING THEREBY THAT THE SECTION 115JB SH ALL BE APPLICABLE NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PRO VISION OF THE ACT AND SHALL HAVE OVERRIDING EFFECT UPON OTHER PROVISIONS OF THE ACT. THE SECTION 115JB STIPULATES PAYMENT OF MINIMUM ALTERNATE TAX BASED U PON THE BOOK PROFIT COMPUTED AS PER PROVISIONS OF SECTION 115JB(2) OF T HE ACT. BOOK PROFIT SHALL BE COMPUTED AS PER SECTION 115JB(2) OF THE ACT WHIC H STIPULATES THAT BOOK PROFIT MEANS NET PROFIT AS SHOWN IN PROFIT AND LOSS ACCOUNT PREPARED FOR FINANCIAL YEAR IN ACCORDANCE WITH PART II AND III O F SCHEDULE VI TO THE COMPANIES ACT, 1956, ALSO COMPLYING WITH OTHER COND ITIONS AS STIPULATED IN SECTION 115JB(2) OF THE ACT. SUCH BOOK PROFIT HAS T O BE INCREASED BY ITEM NOS. (A) TO (K) OF THE SAID EXPLANATION 1 TO SECTIO N 115JB OF THE ACT IF THEY ARE DEBITED TO THE PROFIT AND LOSS ACCOUNT AND FROM SUC H PROFIT ITEM NOS. (I) TO (VIII) OF THE EXPLANATION ARE TO BE REDUCED. THE FI GURE ARRIVED AT AFTER THE ABOVE EXERCISE IS THE BOOK PROFIT OF THE ASSESSEE FOR THE RELEVANT PREVIOUS YEARS. IN THE INSTANT CASE THE PROFIT DECLARED IN THE ORIGINA L RETURN OF INCOME WAS AS PER ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 15 THE REQUIREMENT OF SECTION 115JB OF THE ACT AND THE PROFIT DECLARED IN THE REVISED RETURN DOES NOT MEET THE CONDITIONS LAID DO WN IN THE SAID SECTION. THEREFORE WE ARE OF THE VIEW THAT THERE IS NO INFIR MITY IN THE ORDER OF LD. CIT(A). IN HOLDING SO, WE ALSO RELY IN THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. VS. CIT (2002) 255 IT R 273 (SC) WHERE IN IT WAS HELD THAT:- THE ASSESSING OFFICER, WHILE COMPUTING THE BOOK PR OFIT OF A COMPANY UNDER SECTION 115J OF THE INCOME-TAX ACT, 1961, HAS ONLY THE POWER OF EXAMINING WHETHER THE BOOKS OF ACCOUNT ARE CERTIFIE D BY THE AUTHORITIES UNDER THE COMPANIES ACT AS HAVING BEEN PROPERLY MAI NTAINED IN ACCORDANCE WITH THE COMPANIES ACT. THE ASSESSING OF FICER, THEREAFTER, HAS THE LIMITED POWER OF MAKING INCREASES AND REDUC TIONS AS PROVIDED FOR IN THE EXPLANATION TO SECTION 115J. THE ASSESSI NG OFFICER DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFITS SHOWN IN THE PROFIT AND LOSS ACCOUNT EXCEPT TO THE EXTENT PROVISIONS OF PAR TS II AND III OF SCHEDULE VI TO THE COMPANIES ACT. IN SECTION 115J WAS MADE FOR THE LIMITED PURPOSE OF EMPOWERING THE ASSESSING OFFICER TO RELY UPON THE AUTHENTIC STATEMENT OF ACCOUNTS OF THE COMPANY. WHI LE SO LOOKING INTO THE ACCOUNTS OF THE COMPANY, THE ASSESSING OFFICER HAS TO ACCEPT THE AUTHENTICITY OF THE ACCOUNTS WITH REFERENCE TO THE PROVISIONS OF THE COMPANIES ACT, WHICH OBLIGATE THE COMPANY TO MAINTA IN ITS ACCOUNTS IN A MANNER PROVIDED BY THAT ACT AND THE SAME TO BE SC RUTINIZED AND CERTIFIED BY STATUTORY AUDITORS AND APPROVED BY THE COMPANY IN GENERAL MEETING AND THEREAFTER TO BE FILED BEFORE THE REGIS TRAR OF COMPANIES WHO HAS A STATUTORY OBLIGATION ALSO TO EXAMINE AND BE SATISFIED THAT THE ACCOUNTS OF THE COMPANY ARE MAINTAINED IN ACCORDANC E WITH THE REQUIREMENTS OF THE COMPANIES ACT. SUB-SECTION (1A) OF SECTION 115J DOES NOT EMPOWER THE ASSESSING OFFICER TO EMBARK UP ON A FRESH ENQUIRY IN REGARD TO THE ENTRIES MADE IN THE BOOKS OF ACCOUNT THE COMPANY. IN THE CASE IN HAND, WE FIND THAT THE ASSESSEE HAS FILED THE REVISED RETURN DECLARING THE LOSS AS SEVERAL FINANCIAL IRREGULARIT IES WERE NOTICED IN ITS BOOKS OF ACCOUNTS BUT THE REVISED FINANCIAL STATEMENTS WERE NOT APPROVED IN THE AGM OF THE COMPANY. IN VIEW OF ABOVE, WE DISMISS THE GR OUNDS NO,3 TO 5 OF ASSESSEES CO. 26. GROUND NO.6 RAISED IN ASSESSEES CO IS REGARDIN G THE EXPENDITURE ON DEBIT CARD IN REGARD TO SUPPORT OF REVENUES APPEAL . WE HAVE ALREADY ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 16 DISMISSED THIS ISSUE IN REVENUES APPEAL IN ITA NO. 694/KOL/2013 HENCE, SAME IS DISMISSED AS INFRUCTUS. 27. IN THE RESULT, ASSESSEES CO IS PARTLY ALLOWED. COMING TO CO. 51/KOL/2013 FOR AY 09-10. 28. ASSESSEE RAISED FOLLOWING GROUNDS:- 1. THAT THE LEARNED CIT(A) HAS CORRECTLY ALLOWED D EDUCTION OF RS.22,73,347 UNDER THE HEADING PROVISION WRITTEN BACK EVEN WHE N THE RESPECTIVE PROVISIONS MADE IN THE EARLIER YEARS WERE NEVER ALL OWED AS A BUSINESS DEDUCTION TO THE ASSESSEE COMPANY IN ANY OF THE YEA RS. 2.THAT THE LEARNED CIT(A) HAS RIGHTLY ALLOWED THE B USINESS EXPENDITURE IN THE SUM OF RS.3,87,65,172 (RS.23,87,51,298 MINUS RS.19, 99,86,126) ON THE GROUND THAT CLARIFICATION IN RESPECT OF SUCH EXPENS ES HAS BEEN PROVIDED.. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS, CIRCLE-6, KOLKATA ERRED IN APPLYING SECTION 115JB WHILE ALLOWING THE LOSSES CLAIMED UNDER NORMAL COMPUTATION OF THE INCOME TAX ACT BASED ON RESULT O F BOOKS OF ACCOUNT AND ADDITIONAL DOCUMENTS FILED AT THE TIME OF FILING RE VISED. 4. THAT THE LEARNED CIT(A) ERRED IN ARBITRARILY APP LYING SECTION 115JB WHILE IGNORING THE REVISED RETURN FILED BY THE ASSESSEE C OMPANY ON 28 TH MARCH, 2011 FOR THE ASSESSMENT YEAR 2009-10, IN COURSE OF THE I MPUGNED ASSESSMENT PROCEEDINGS, PARTICULARLY IN SO FAR AS IT RELATED T O THE RECTIFICATION / MODIFICATION OF THE ASSESSABLE INCOME, ARISING WHOLLY ON ACCOUNT OF FRAUDULENT / FICTITIOUS ENTRIES BASED UPON NON-EXISTENT TRANSACTIONS RECORD ED BY THE SENIOR MANAGERIAL PERSONNEL DURING THE THREE FINANCIAL YEA RS ENDING 31 ST MARCH, 2007, 31 ST MARCH, 2008 & 31 ST ARCH, 2009 CORRESPONDING TO THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10. 5. THAT THE LEARNED CIT(A) ERRED IN IGNORING THE RE SULT OF FRAUDULENT / FICTITIOUS ENTRIES WHILE APPLYING SECTION 115B, IN SO FAR AS T HESE AFFECTED THE TAXABLE INCOME FOR THE ASSESSMENT YEAR 2009-10 MERELY BECAU SE THE ACCOUNTING ENTRIES RECTIFYING / MODIFYING THE EFFECT OF SUCH F RAUDULENT / FICTITIOUS ENTRIES WERE MADE BY THE ASSESSEE COMPANY IN THE FINANCIAL YEAR 2009-10 CORRESPONDING TO THE ASSESSMENT YEAR 2010-11 AND NO T IN THE FINANCIAL YEAR ENDING 31 ST MARCH, 2009 CORRESPONDING TO THE ASSESSMENT YEAR 2 009-10, NOW UNDER APPEAL. 29. SINCE COMMON GROUNDS ARE INVOLVED IN ASSESSEES CO NO.50/KOL/2013 THE FACTS ARE EXACTLY IDENTICAL, BOTH THE PARTIES A RE AGREED WHATEVER VIEW ITA NO.694-695/KOL/2013 & CO 50-51/KOL/2013 A.YS 08-09 & 09-10 DCIT, CIR-6, KOL V. M/S TRANSAFE SERVICES LTD. PAG E 17 TAKEN IN THE ABOVE CO NO. 50/KOL/2013 MAY BE TAKEN IN THE CO NO. 51/KOL/2013 WE HOLD ACCORDINGLY. 30. IN THE RESULT, APPEALS OF REVENUE ARE DISMISSED AND THAT OF ASSESSEES CO NO.50-51/KOL/2013 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 11/ 05/2016 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP '#$- 11 / 05 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S TRANSAFE SERVICES LTD. 21, NETAJI SU BHAS ROAD, KOLKATA-01 2. /REVENUE-DCIT CIRCLE-6, ROOM NO.17, 6 TH FL, AAYAKAR BHAWAN, P7, CHOWRINGHEE SQUARE, KOLKATA- 69 3.#,#-. / / CONCERNED CIT KOLKATA 4. /- / CIT (A) KOLKATA 5.2 3455-., -.!, / DR, ITAT, KOLKATA 6.489:; / GUARD FILE. BY ORDER/ , /TRUE COPY/ /# -.!,