ACIT CIR 3(3), MUMBAI V. YASHEKA IMPEX P.LTD, MUMBAI

ITA 7452/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8249 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Section: 143(3); 115JB; 11

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI . . , ,, , , !' !' !' !', ,, , # # # # BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMIT SHUKLA, JM ITA NO.7452/MUM/2012: ASST.YEAR 2009-2010 THE ASSTT.COMMISSIONER OF INCOME - TAX CIRCLE 3(3) MUMBAI. $ $ $ $ / VS. M/S.YASHEKA IMPEX PVT.LTD. 101-B WING, MITTAL COURT NARIMAN POINT, MUMBAI 400 021. PAN : AAACY0293N. ( &' / // / APPELLANT) ( ()&' / RESPONDENT) &' * + * + * + * + /APPELLANT BY : SHRI PAVAN KUMAR BEERLA ()&' * + * + * + * + /RESPONDENT BY : SHRI J.P.BAIRAGRA $ * , / / / / DATE OF HEARING : 14.10.2014 -./ * , / DATE OF PRONOUNCEMENT : 31.10.2014 ! ! ! ! / / / / O R D E R PER AMIT SHUKLA (JM) : THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT AG AINST THE ORDER DATED 22.08.2012 PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)-7, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED U/S 14 3(3) FOR THE ASSESSMENT YEAR 2009-2010, MAINLY ON THE FOLLOWING GROUND:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION MADE BY THE AO OF RS.45,41,120/- TO THE BOOK PROFIT WITHOUT APPRECIATING THE FACT THAT THE SAME IS BEING THE ARBITRARY TRADI NG LOSS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS AND THE AS SESSEE HAS SUO MOTO OFFERED THE SAME FOR TAXATION IN THE ASSES SMENT COMPLETED BY THE AO U/S 143(3) OF THE ACT. ITA NO.7452/MUM/2012. M/S.YASHEKA IMPEX PVT.LTD. 2 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF GENERAL TRADING, IMPORT AND EXPORT, FINANCING AND INVESTMEN TS, DEALING IN PROPERTY ETC. IN THE TRADING OF FABRIC THE ASSESSEE HAD SHOW N LOSS OF RS.45,41,120. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE SURRENDERED THE LOSS AND OFFERED TO TAX THE TRADING LOSS TO BUY PEA CE, AS THE SALES AND PURCHASES OF FABRICS DURING THE YEAR COULD NOT BE S UBSTANTIATED. ACCORDINGLY, THE ASSESSING OFFICER ADDED THE LOSS OF RS.45,41,12 0 TO THE TOTAL INCOME OF THE ASSESSEE UNDER THE NORMAL COMPUTATION OF INCOME . FURTHER, THE ASSESSING OFFICER MADE THE SIMILAR ADDITION WHILE C OMPUTING THE BOOK PROFIT U/S 115JB, AGAINST WHICH ASSESSEE FELT AGGRIEVED. 3. BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT TH E PROFIT AND LOSS ACCOUNT WAS PREPARED BY THE ASSESSEE AS PER THE COM PANIES ACT, 1956, AND WAS ADOPTED BY THE COMPANY IN ITS ANNUAL GENERAL ME ETING. HENCE, NO ADDITION ON ACCOUNT OF TRADING LOSS SURRENDERED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS CAN BE ADDED IN THE BOOK PRO FIT, WHICH IS ONLY SUBJECT TO ADJUSTMENT AS PER EXPLANATION 1 TO SUB-SECTION (2) OF SECTION 115JB OF THE INCOME-TAX ACT, 1961. SECTION 115JB(2) IS A SELF-CONTAINED CODE IN ITSELF AND NO OTHER ADJUSTMENT CAN BE MADE, EXCEPT PROVIDED THEREIN. RELIANCE WAS PLACED ON SEVERAL DECISIONS BY THE ASS ESSEE WHICH HAS BEEN NOTED BY THE CIT(A). THE ASSESSEES ENTIRE SUBMISSI ON HAS BEEN INCORPORATED BY THE CIT(A) AT PAGES 2 AND 3 OF THE APPELLATE ORDER. THE LEARNED CIT(A), AFTER TAKING NOTE OF THE ASSESSEES SUBMISSION AND ALSO THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF A POLLO TYRES LTD. V. CIT [255 ITR 273 (SC)], HELD THAT NO SUCH ADDITION IN T HE BOOK PROFIT CAN BE MADE AS THE A.O. CANNOT ALTER OR MAKE ANY ADDITION BEYON D ENVISAGED IN ITA NO.7452/MUM/2012. M/S.YASHEKA IMPEX PVT.LTD. 3 EXPLANATION 1 TO SECTION 115JB(2). THUS, THE ADDITION MADE BY TH E A.O. IN THE BOOK PROFIT WAS DELETED. 4. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE, SUBMITTED THAT THE LOSS SURRENDERED BY THE ASSESSEE WAS ON ACCOUNT OF TRADING LOSS, WHICH IS PART OF THE PROFIT AND LOSS ACCOUNT, AND HENCE, THE SAME SHOULD BE TAKEN INTO ACCOUNT WHILE COMPUTING THE BOOK PROFIT U/S 11 5JB. 5. ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTED THAT THE PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH THE COMPAN IES ACT AND AS ADOPTED BY THE COMPANY IN GENERAL MEETING CAN ONLY BE TAKEN AS A BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB, AND WHATEV ER ADJUSTMENT IS REQUIRED TO BE MADE, THE SAME CAN BE MADE, ONLY AS PER EXPLANATION 1 TO SUB-SECTION (2) OF SECTION 115JB. HE THUS STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE IMPUGNED ORDER, WE AGREE WITH THE REASONING GIVEN BY THE CIT (A) THAT NO ADDITION IS PERMITTED TO BE MADE BY THE ASSESSING OFFICER BEYON D THE SPECIFIC PROVISIONS AS ENUMERATED IN THE CLAUSES GIVEN IN EXPLANATION 1 TO SUB-SECTION (2) OF SECTION 115JB. THE ASSESSING OFFICER, WHILE COMPUTI NG THE BOOK PROFIT OF A COMPANY U/S 115JB, CAN EXAMINE THE PROFIT AND LOSS ACCOUNT AS PROVIDED UNDER THE COMPANIES ACT, 1956 AND HIS POWER IS ONLY LIMITED TO MAKE ANY INCREASE OR DEDUCTION AS PROVIDED IN EXPLANATION 1 TO SUB-SECTION (2) OF SECTION 115JB. THE A.O. DO NOT HAVE ANY POWER OR JU RISDICTION TO GO BEYOND THE NET PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION. THIS PROPOSITION OF LAW IS WELL SUPPORTED BY THE ITA NO.7452/MUM/2012. M/S.YASHEKA IMPEX PVT.LTD. 4 DECISION OF THE HONBLE APEX COURT IN THE CASE OF A POLLO TYRES LTD. (SUPRA). THUS, WE AFFIRM THE ORDER OF THE CIT(A) AND THE GRO UND RAISED BY THE REVENUE IS DISMISSED. 7. 0 1 * 2 0 * 34 IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF OCTOBER, 2014. ! * -./ 5$1 . * 6 SD/- SD/- ( B.R.BASKARAN ) ( AMIT SHUKLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 5$ DATED : 31 ST OCTOBER, 2014. DEVDAS* ! * ( 7 87/ ! * ( 7 87/ ! * ( 7 87/ ! * ( 7 87/ / COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. 9 ( ) / THE CIT, MUMBAI. 4. 9 / CIT(A)-7, MUMBAI 5. 7<6 ( $ , , / DR, ITAT, MUMBAI 6. 6=> ? / GUARD FILE. !$ !$ !$ !$ / BY ORDER, )7 ( //TRUE COPY// @ @@ @/ // /3 3 3 3 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI