ADDL CIT RG 8(2), MUMBAI V. KAMAT HOTELS (I) LTD, MUMBAI

ITA 708/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3416 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2005-2006
• Appeal Filed On: 25-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R C JAIN
• Keywords: Retrospective amendment; Bad and doubtful debts
• Section: 115JB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.708/MUM/2011 ( / ASSESSMENT YEARS: 2005-06) DY.COMMISSUIONER OF INCOME TAX-8(2), ROOM NO.209, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S KAMA T HOTELS (INDIA) LTD., 70C, NEHRU ROAD, VILE PARLE (EAST), MUMBAI-400072 ./ ./PAN/GIR NO. : AAACK2912L ( ( / APPELLANT) .. ( ) ( / RESPONDENT) ( / APPELLANT BY : MS.NEERAJA PRADHAN ) ( + /RESPONDENT BY : SHRI R.C.JAIN + - / DATE OF HEARING : 12.6.2013 + - /DATE OF PRONOUNCEMENT : 19.6.2013 / O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2005-06 AGAINST ORDER OF LD. CIT(A)-XVII, MUMBAI DATED 29.10.2010 TAKING FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN RELYING ON THE CASE OF APOLLO TYR ES 255 ITR 273 WHICH WAS RENDERED IN THE CONTEXT OF SECTION 115J AND NOT IN THE CONTEXT OF SECTION 115JB WHICH WAS INSERTED BY FINANCE ACT 2000 W.E.F.1.4.2 001; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE PROVISION OF RS.7 5,00,000/- FOR DOUBTFUL LOANS AND ADVANCES IS AN ASCERTAINED LIABILITY AND NO ADJ USTMENT WAS REQUIRED TO BE MADE IN COMPUTING THE BOOK PROFITS, RELYING ON THE DECISION OF THE APEX COURT IN THE CASE OF APOLLO TYRES 225 ITR 273 WITHOUT AP PRECIATING THE FACT THAT EXPLANATION 1(C) OF SECTION 115JB EXPRESSLY STIPUL ATES SUCH DISALLOWANCE; I.T.A. NO. 708/MUM/2011 2 3. THE APPELLANT PAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNN ING AND MAINTAINING HOTEL AND RESTAURANTS. THE ASSESSEE FILED THE RETURN OF INCO ME DECLARING TOTAL INCOME AT RS.9,18,26,156/-. THE AO ASSESSED THE TOTAL INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OF ACT AT RS.NIL AFTER SETTING OFF OF B ROUGHT FORWARD LOSSES OF EARLIER YEARS OF RS.9,47,87,284/-. HOWEVER, UNDER THE PROVISIONS MA T, THE AO COMPUTED THE BOOK PROFIT AT RS.8,96,58,273/-. SINCE TAX PAID ON THE INCOME COMPUTED UNDER THE PROVISIONS OF MAT I.E. U/S 115JB OF THE INCOME TAX ACT, 1961 (THE ACT) IS HIGHER THAN THE TAX PAID UNDER THE NORMAL PROVISIONS OF ACT, THE AO COMPUTE D THE INCOME OF THE ASSESSEE U/S 115JB OF THE ACT AS THE ASSESSEES INCOME AND ACCO RDINGLY COMPUTED THE TAX. IT IS RELEVANT TO STATE THAT WHILE COMPUTING BOOK PROFIT , THE AO MADE AN ADDITION OF RS.75 LAKHS AS UNDER : ADD : PROVISIONS FOR DOUBTFUL LOANS AND ADVANCES . BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LD. CIT(A) RELYING ON THE DECISION OF THE MUMBAI BENCH A OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 DATED 12.2.2010 IN ITA NO.3304/MUM/2007 HELD THAT NO ADJUSTMENT IS REQUIRE D TO BE MADE IN RESPECT OF THE PROVISIONS OF RS.75 LAKHS FOR DOUBTFUL LOANS AND A DVANCES WHICH WERE ADDED BY THE AO WHILE COMPUTING THE BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB OF THE ACT CONSIDERING IT AS PROVISION FOR ASCERTAIN LIABILITI ES. THE RELEVANT PARAGRAPHS 7.1 AND 7.2 OF THE ORDER OF LD. CIT(A) READ AS UNDER : 7.1 IT WAS STATED THAT THE APPELLANT MADE A PROVIS ION OF RS.75,00,000/- FOR DOUBTFUL LOANS AND ADVANCES, AS PER SCHEDULE VI O F THE COMPANIES ACT. HOWEVER, THE AO IN COMPUTING THE BOOK PROFIT ADDED THE SAID SUM OF RS.75,00,000/- WITHOUT GIVING ANY REASON. IT WAS A RGUED IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF APOLLO TYRES (225 ITR 273) AND THE ORDER OF THE ITAT MUMBAI A BENCH DATED 12.02.2010 FOR AY 2003-04 WHEREIN IN PARA 30 IT WAS HELD THAT AFTER CONSIDERING THE SUBMISSION, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN RESPECT OF THIS GROUND ALSO. NEITHER ANY QUERY WAS RAISED BY THE AO BEFORE COMPUTING THE INCOME U/S 115JB. THE PROVISIONS FOR GRATUITY AND FOR LEAVE ENCASHMENT ARE ON THE BASIS OF ASCERTAINED LIABILITY AS EXPLAINED BY THE LD. AR OF THE ASSESSEE. THEREFO RE, THE COMPUTATION OF INCOME U/S 115JB WAS NOT JUSTIFIED. THIS IS ALSO C ONTRARY TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF APOLL O TYRE(SUPRA). IN I.T.A. NO. 708/MUM/2011 3 VIEW OF THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE COMPUTATION OF INCOME U/S 115JB AND ALLOW THE GROUND OF THE ASSESS EE. THE REMAINING ISSUE IS AGAINST CHARGING OF INTEREST U/S 234D. THE ADDITION WAS HENCE NOT WARRANTED. 7.2 THE SUBMISSION HAS BEEN CONSIDERED. AS SUCH PR OVISION IS AN ASCERTAINED LIABILITY, THE ARGUMENT THAT NO ADJUSTMENT WAS REQ UIRED IN RESPECT OF THIS ITEM IS ACCEPTED. THE AO IS DIRECTED TO RE-COMPUTE PROFITS U/S 115JB ACCORDINGLY. HENCE, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING, THE LD. DR REFERRE D THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT, 2009 AND SUBMITTED THAT A RETR OSPECTIVE AMENDMENT HAS BEEN MADE BY INSERTING CLAUSE(I) TO EXPLANATION (1) TO SUB-SECTION (2) OF SECTION 115JB OF THE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.2001 A ND ACCORDINGLY THE PROVISIONS FOR DOUBTFUL DEBTS AND PROVISION FOR DOUBTFUL ADVANCES HAVE TO BE ADDED BY COMPUTING THE BOOK PROFIT. THE LD. DR ALSO REFERRED THE DECISI ON OF MUMBAI BENCH C OF THE TRIBUNAL IN THE CASE OF ACIT V/S M/S. ESSAR STEEL L TD., IN ITA NOS. 850/A/2002, 3228/M/2005, 3229/M/2005 AND 4214/A/2003 DATED 4.4 .2012 AND SUBMITTED THAT THE SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE RE VENUE. THAT THE TRIBUNAL HAS HELD THAT THE PROVISIONS MADE FOR DOUBTFUL DEBTS AND D EBITED TO THE PROFIT AND LOSS ACCOUNTS HAVE TO BE ADDED IN THE PROFIT FOR ARRIVING THE BO OK PROFIT U/S 115JA/115JB OF THE ACT. SHE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS NOT GIVEN ANY FINDING IN THE ORDER EXCEPT RELYING ON THE EARLIER DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL DATED 12.2.2010 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 TO DIRECT THE AO NOT TO MAKE ADJUSTMENT TO THE SAID PROVISION OF RS.75 LAKHS MAD E BY THE ASSESSEE TO COMPUTE BOOK PROFIT. 5. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT TH E SAME ISSUE IN THE ASSESSEES OWN CASE HAS BEEN CONSIDERED BY THE MUMBAI BENCH OF THE TRIBUNAL FOR ASSESSMENT YEAR 2003-04 VIDE ORDER DATED 12.2.2010, AND FILED A COPY OF THE SAID ORDER OF THE TRIBUNAL TO SUBSTANTIATE HIS SUBMISSIONS. THE LD. AR ALSO REFERRED THE DECISION OF THE HONBLE KARNATAKA HIGH COURT DATED 29.8.2011 IN T HE CASE OF CIT V/S YOKOGAWA INDIA LTD. (2012)17 TAXMANN.COM 15(KAR). HE FURTHER SUBM ITTED THAT THE ACCOUNT OF THE ASSESSEE-COMPANY HAVE BEEN ACCEPTED BY THE BOARD O F DIRECTORS AND APPROVED BY THE SHAREHOLDERS AND WERE ALSO CERTIFIED BY THE AUDITO RS OF THE ASSESSEE-COMPANY AND ACCORDINGLY, THE SAME CANNOT BE DISTURBED WHILE COMPUTING BOOK PROFIT U/S 115JB. HE I.T.A. NO. 708/MUM/2011 4 RELIED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF APOLLO TYRES [2002] 255 ITR 273 (SC). AT THE TIME OF HEARING, THE LD. AR SUBMITTED IN REPLY TO A QUERY BY THE BENCH THAT THE ASSESSEE WHILE MAKING THE SAID PROV ISIONS OF RS.75 LAKHS UNDER THE HEAD PROVISIONS FOR DOUBTFUL LOANS AND ADVANCES, T HE ASSESSEE HAD NOT WRITTEN OFF THE SAID AMOUNT FROM THE LOANS AND ADVANCES THOUGH ASSE SSEE HAS DEBITED THE AMOUNT OF RS.75 LAKHS TO ITS PROFIT AND LOSS ACCOUNT. 6. WE HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSI ONS OF THE LD. REPRESENTATIVES OF THE PARTIES. WE HAVE ALSO CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW, THE EARLIER ORDER OF THE TRIBUNAL DATED 12.2.2010 (SUPRA) AS W ELL AS THE DECISIONS REFERRED TO BY THE REPRESENTATIVES BEFORE US (SUPRA). WE HAVE A LSO CONSIDERED THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT, 2009 TO EXPLANAT ION (1) TO SUB-SECTION (2) OF SECTION 115JB OF THE ACT. 7. AT THE OUTSET, WE MAY STATE THAT THE SAID DECI SION OF THE TRIBUNAL DATED 12.2.2010 (SUPRA) IS NOT RELEVANT WHILE DECIDING TH E ISSUE BEFORE US. IN THE SAID CASE, THE TRIBUNAL VIDE PARAGRAPH 30 HAS CONSIDERED THE ISSUE RELATING TO THE PROVISIONS OF GRATUITY AND PROVISIONS OF LEAVE ENCASHMENT MADE B Y THE ASSESSEE WHEREIN THE CONTENTION OF THE LD. AR WAS ACCEPTED THAT THE SAI D PROVISIONS MADE BY THE ASSESSEE TOWARDS GRATUITY AND LEAVE ENCASHMENT WERE ON THE BASIS OF ASCERTAINED LIABILITY. WE CONSIDER IT PRUDENT TO STATE PARAGRAPHS 26 TO 30 OF THE SAID ORDER (SUPRA) WHICH ARE AS UNDER : 26. THE NEXT ISSUE RELATES TO CONFIRMING THE ADDIT ION TO BOOK PROFITS U/S 115JB AT RS.15,57,553/-. THE AO MADE COMPUTATION OF INCOME U/S 115JB ON ACCOUNT OF PROVISION FOR GRATUITY AT RS.6,68,143/- AND ON ACCOUNT OF PROVISION OF LEAVE ENCASHMENT AT RS.8,89,410/- TOTALING TO RS. 15,57,553/-. 27. THE CIT(A) ALSO CONFIRMED THE ACTION OF AO. 28. IT WAS SUBMITTED BEFORE THE TRIBUNAL BY THE LD. AR OF THE ASSESSEE THAT THE DECISION OF THE LOWER AUTHORITIES IS CONTRARY T O THE DECISION OF SUPREME COURT IN THE CASE OF APOLLO TYRES (255 ITR 273). IT WAS FURTHER SUBMITTED THAT THESE PROVISIONS WERE ON ACCOUNT OF ASCERTAINED LIABILITY . THEREFORE, THE COMPUTATION OF INCOME U/S 115JB WAS NOT JUSTIFIED. IT WAS ALSO S UBMITTED THAT EVEN NO QUERY WAS RAISED BY THE AO IN THIS REGARD. 29. ON THE OTHER HAND, THE LD. DR PLACED RELIANCE ON THE ORDERS OF THE AO AND CIT(A). 30 AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN RESPECT OF THIS GROUND ALSO. NEITHER ANY QUERY WAS RAISED BY THE AO BEFORE COMPUTING THE INCOME U/S 115JB. THE PROVISIO NS FOR GRATUITY AND FOR LEAVE ENCASHMENT ARE ON THE BASIS OF ASCERTAINED LIABILIT Y AS EXPLAINED BY THE LD. AR OF I.T.A. NO. 708/MUM/2011 5 THE ASSESSEE. THEREFORE, THE COMPUTATION OF INCOME U/S 115JB WAS NOT JUSTIFIED. THIS IS ALSO CONTRARY TO THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF APOLLO TYRES (SUPRA). IN VIEW OF THESE FACTS AND C IRCUMSTANCES, WE SET ASIDE THE COMPUTATION OF INCOME U/S 115JB AND ALLOW THE GROU ND OF THE ASSESSEE. IN VIEW OF THE ABOVE, WE HOLD THAT THE RELIANCE P LACED BY THE LD. AR ON THE EARLIER DECISION OF THE TRIBUNAL DATED 12.2.2010 (SUPRA) I S NOT RELEVANT FOR DECIDING THE ISSUE BEFORE US. 8. NOW, WE TAKE UP THE ISSUE BEFORE US AS TO WHETH ER THE PROVISIONS MADE FOR DOUBTFUL LOANS AND ADVANCES CAN BE ADDED BACK OR NO T WHILE ASCERTAINING THE BOOK PROFIT FOR THE PURPOSE OF LEVY OF MAT U/S 115JB OF THE ACT. 9. SECTION 115JB OF THE ACT PROVIDES FOR LEVY OF M AT ON THE BASIS OF BOOK PROFIT OF THE COMPANY. AS PER EXPLANATION (1), AFTER SUB-SE CTION (2), THE EXPRESSION BOOK PROFIT MEANS NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT IN PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS II AND III OF SCHEDULE VI TO THE COMPANIES ACT, 1956 AS INCREASED OR REDUCED BY CERTAIN ADJUSTMENTS , AS SPECIFIED IN THAT SECTION. WE OBSERVE THAT BY THE FINANCE (NO.2) ACT, 2009 A NEW CLAUSE (I) IN EXPLANATION (1) TO SUB-SECTION(2) OF THE SAID SECTION HAS BEEN INSERTE D WITH RETROSPECTIVE EFFECT FROM 1.4.2001 SO AS TO PROVIDE THAT IF ANY PROVISIONS FO R DIMINUTION IN THE VALUE OF ANY ASSETS HAS BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT, I T IS TO BE ADDED TO THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE PURPOS E OF COMPUTATION OF BOOK PROFIT. IT IS RELEVANT TO STATE THAT SIMILAR AMENDMENT WAS ALSO M ADE BY THE SAID FINANCE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.1998 IN SECTION 115JA OF THE ACT BY INSERTING A NEW CLAUSE (G) IN THE EXPLANATION AFTER SUB-SECTION (2 ) OF THE SAID SECTION. THUS, THE SAID AMENDMENT TO ADD BACK THE PROVISIONS FOR DIMINUTIO N IN THE VALUE OF ANY ASSETS IS TO BE ADDED TO THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT HAS BEEN MADE RETROSPEC TIVE FROM 1 ST DAY OF APRIL, 1998 AS PER SECTION 115JA AND WHEREAS AS PER SECTION 115JB IT IS MADE EFFECTIVE RETROSPECTIVELY FROM 1.4.2001. SINCE IN THE ASSESSMENT YEAR UNDER C ONSIDERATION SECTION 115JB OF THE ACT IS APPLICABLE, THE SAID AMENDMENT MADE BY INSE RTING A NEW CLAUSE (I) IN EXPLANATION (1) TO SUB-SECTION (2) OF SECTION 115JB WILL APPLY IN RELATION TO FROM THE ASSESSMENT YEAR 2001-02 AND FOR SUBSEQUENT ASSESSMENT YEARS WH ILE COMPUTING BOOK PROFIT FOR LEVY OF MINIMUM ALTERNATE TAX. IN VIEW OF THE ABOV E AMENDMENT IT IS RELEVANT TO STATE THAT THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT V/S HCL COMNET SYSTEMS & SERVICES LIMITED[2008]305 ITR 409(SC) WAS OVERRUL ED WHEREIN, THEIR LORDSHIPS OF I.T.A. NO. 708/MUM/2011 6 THE HONBLE APEX COURT HAVE HELD THAT PROVISIONS MA DE FOR BAD AND DOUBTFUL DEBTS ARE NOT FOR MEETING LIABILITY; THAT PROVISION FOR DOUB TFUL DEBTS AND DOUBTFUL ADVANCES DID NOT FALL WITHIN CLAUSE (C ) OF THE SAID EXPLANATION (1 ) IN AS MUCH AS THEY AMOUNTED TO PROVISION IN RESPECT OF DIMINUTION IN THE VALUE OF ASSET. ANY PROVISION MADE TOWARDS IRRECOVERABILITY OF A DEBT CANNOT BE SAID TO BE A PROVISION FOR LIABILITY. HENCE PROVISION FOR BAD AND DOUBTFUL DEBTS COULD NOT BE ADDED BAC K UNDER CLAUSE (C) OF EXPLANATION (1) TO SUB-SECTION (2) OF SECTION 115JA OF THE AC T. 10. DURING THE COURSE OF HEARING, LD.AR SUBMITTED T HAT AMENDMENT MADE BY THE FINANCE (NO.2) ACT, 2009 WAS CONSIDERED BY THE HO NBLE KARNATAKA HIGH COURT IN THE CASE OF YOKOGAWA INDIA LTD. (SUPRA) AND HELD THAT EVEN AFTER AMENDMENT NO ADDITION TO BOOK PROFIT OF THE PROVISION MADE FOR BAD AND D OUBTFUL DEBTS COULD BE MADE FOR MAT. WE OBSERVE THAT THE HONBLE KARNATAKA HIGH COURT I N THE CASE OF YOKOGAWA INDIA LTD. (SUPRA) CONSIDERED THE ISSUE IN THE LIGHT OF CLAUS E ( C ) OF EXPLANATION (1) TO SECTION 115JB OF THE ACT WHEREIN IT WAS HELD THAT THE PROV ISIONS FOR BAD AND DOUBTFUL DEBTS CANNOT BE ADDED BACK WHILE COMPUTING THE NET PROFIT FOR THE PURPOSE OF LEVY OF MAT U/S 115JB OF THE ACT. WE ALSO OBSERVE THAT THE FACTS IN THE CASE OF THE ASSESSEE BEFORE US ARE NOT SIMILAR TO THE CASE OF YOKOGAWA INDIA LTD. (SUPRA) BECAUSE IN THAT CASE THEIR LORDSHIPS HAVE CATEGORICALLY STATED THAT THE ASSESS EE SIMULTANEOUSLY ALSO REDUCED THE AMOUNT FROM THE LOAN AND ADVANCES OR THE DEBTORS FR OM THE ASSETS SIDE OF THE BALANCE SHEET TO THE EXTENT OF CORRESPONDING AMOUNT SO THA T, AT THE END OF THE YEAR, THE AMOUNT OF LOANS AND ADVANCES/DEBTORS IS SHOWN AS N ET OF THE PROVISIONS FOR THE IMPUGNED BAD DEBTS. THEIR LORDSHIPS ALSO CONSIDERE D THE GENESIS OF AMENDMENT IN THE CONTEXT OF SECTION 36(1)(VII) OF THE ACT AND THEREFORE HELD THAT THE AMENDMENT MADE RETROSPECTIVELY IN THAT WAY WILL NOT EFFECT TH E BOOK PROFIT. 11. HOWEVER, IN THE CASE BEFORE US, IT IS NOT THE C ASE OF THE ASSESSEE THAT IT HAS ACTUALLY REDUCED THE LOANS AND ADVANCES OR THE DEB TS AND IF IT IS SO THEN THERE IS NO NEED TO MAKE PROVISION FOR SUCH BAD AND DOUBTFUL DE BTS, AND THE ASSESSEE COULD WRITE OFF THE SAID AMOUNT INSTEAD OF STATING IT AS PROVI SION FOR BAD AND DOUBTFUL DEBTS. ON THE ONE HAND, THE ASSESSEE HAS REDUCED THE AMOUNT O F RS.75 LAKHS FROM THE PROFIT AND LOSS ACCOUNT, BUT NOT WRITE OFF/REDUCED THE LOANS AND ADVANCES IN THE BALANCE SHEET. HENCE THE DECISION OF THE HONBLE KARNATAKA HIGH COURT DOES NOT APPLY TO THE CASE OF THE ASSESSEE BEFORE US. I.T.A. NO. 708/MUM/2011 7 12. IN VIEW OF THE ABOVE, WE HOLD THAT THE DECISION OF THE LD. CIT(A) TO PLACE RELIANCE ON THE DECISION OF THE ITAT, MUMBAI BENCH DATED 12.2.2010 (SUPRA) AND TO DIRECT TO AO TO REDUCE THE SAID AMOUNT BY RS.75 L AKHS WHILE ASCERTAINING THE BOOK PROFIT FOR THE PURPOSE OF LEVY OF MAT IS NOT JUSTI FIED AND ON THE OTHER HAND, IT IS CONTRARY TO THE PROVISIONS OF ACT. MOREOVER, THE D ECISION OF THE MUMBAI BENCH OF THE TRIBUNAL DATED 4.4.2012 AS RELIED BY THE LD. DR IN THE CASE OF M/S. ESSAR STEEL LTD. (SUPRA), SQUARELY APPLY TO THE CASE BEFORE US. HE NCE, WE REVERSE THE ORDER OF THE LD. CIT(A) BY ALLOWING THE GROUND OF APPEAL TAKEN BY TH E DEPARTMENT. 13. IN THE RESULT, APPEAL OF THE DEPARTMENT IS ALLO WED. ORDER PRONOUNCED AFTER HEARING LD.DR IN THE OPEN COURT ON 19TH JUNE, 2013 + 1 2 19TH JUNE, 2013 + SD/- SD/- ( /RAJENDRA ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2 DATED 19 / 06/2013 . . ./ SRL , SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. ( / THE APPELLANT 2. ) ( / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 7 )9 , - 9 , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, $ //TRUE COPY// (ASSTT. REGISTRAR) - 9 , /ITAT, MUMBAI