M/s. ICICI Bank Ltd., CHENNAI V. ACIT, CHENNAI

ITA 869/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1169 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-03-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 10-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S MAHARANA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Rectification of order; Bad and doubtful debts
• Section: 14A; 115JB; 148; 263; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER .. ITA NO.869/MDS./2011 ASSESSMENT YEAR:2000-01 M/S.ICICI BANK LTD., (ERSTWHILE BANK OF MADURA LTD) ICICI BANK TOWERS, ACCOUNTING & REPORTING GROUP, 4 TH FLOOR, EAST WING, NO.24,SOUTH PHASE, AMBATTURE INDUSTRIAL ESTATE, AMBATTUR, CHENNAI. VS. THE ACIT, COMPANY CIRCLE 1(2), CHENNAI. PAN AAACB 2929 E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.VIJAYARAGHAVAN ADVOCATE RESPONDENT BY : DR.S.MAHARANA, CIT D.R. DATE OF HEARING : 13 .03.13 DATE OF PRONOUNCEMENT : 22 . 03.13 ITA. 869 /MDS/11 ICICI BANK 2 O R D E R PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT ASSAILS AN ORDER UNDER SECTION 263, DATED 25.03.09, ON A RECTIFICAT ION ORDER PASSED BY THE ASSESSING OFFICER ON 08.01.07. 2. FACTS APROPOS ARE THAT ASSESSEE HAD FILED ITS R ETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING TOTAL INCOME OF ` 21,39,92,530/-. THE RETURN WAS PROCESSED UNDER SEC TION 143(1) OF THE INCOME TAX ACT,1961 (IN SHORT THE ACT). T HEREAFTER, A NOTICE UNDER SECTION 148 WAS ISSUED ON 21.01.02, SE EKING TO REOPEN THE ASSESSMENT. IN THE ASSESSMENT, PURSUANT TO SUCH REOPENING ADDITIONS WERE MADE BY THE ASSESSING OFFI CER FOR DIFFERENCE IN INTEREST ON SECURITIES, BROKEN PERIOD INTEREST, CLAIM FOR BAD DEBTS, AND UNDER SECTION 14A OF THE ACT. A SSESSEES TOTAL INCOME WAS DETERMINED AT ` 82,56,62,710/-. IN SUCH ASSESSMENT, THERE WAS NO COMPUTATION OF INCOME MADE BY THE ASSE SSING OFFICER UNDER SECTION 115 JA OF THE ACT. THOUGH NO REASON HAS BEEN MENTIONED FOR THE OMISSION IN WORKING OUT THE INCOME UNDER SECTION 115 JA OF THE ACT, IT SEEMS 30% OF THE BOOK PROFIT WAS MUCH LESS THAN THE TOTAL INCOME OF ` 82,56,62,710/- ASSESSED. AS ITA. 869 /MDS/11 ICICI BANK 3 PER THE ASSESSEE, 30% OF THE BOOK PROFITS WORKED OU T TO ` 10,09,82,342/- ONLY. ON SUCH ASSESSMENT, APPEAL WA S FILED BY THE ASSESSEE AND THERE WERE CERTAIN RELIEFS GRANTED BY THE CIT(A). ASSESSING OFFICER ON 30.07.04 PASSED AN OR DER GIVING EFFECT TO THE DIRECTIONS OF THE CIT(A) AND IN SUCH ORDER, THE TOTAL INCOME WAS RECOMPUTED AT ` 13,53,83,639/-. IN SUCH ORDER ALSO, THERE WAS NO COMPUTATION FOR BOOK PROFIT UNDER SECT ION 115JA OF THE ACT. IT IS TO BE NOTED THAT, 30% OF THE BOOK PR OFIT UNDER SECTION 115JA, WORKED OUT BY THE ASSESSEE WAS ` 10,09,82,342/-, WHICH WAS STILL LOWER THAN TOTAL INCOME MENTIONED ABOVE. THEREAFTER, ASSESSEE FILED A PETITION FOR RECTIFICATION UNDER S ECTION 154 OF THE ACT ON 21.01.06 WHEREIN ASSESSEE POINTED OUT THAT C APITAL PORTION OF LEASE RENTALS WERE TO BE REDUCED FROM THE TOTAL INCOME. THOUGH THIS APPLICATION WAS ORIGINALLY REJECTED BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 05.05.06, LATER, BASE D ON DIRECTION OF CIT(A), ON AN APPEAL FILED BY THE ASSESSEE, RECTIFI CATION ORDER WAS PASSED WHEREBY FROM THE TOTAL INCOME EARLIER DETERM INED OF ` 13,53,83,639/-, CAPITAL PORTION OF LEASE RENTAL ` 7,70,47,493/- WAS EXCLUDED. THUS, TOTAL INCOME AS PER NORMAL PROV ISIONS CAME DOWN TO ` 5,83,36,146/-. AT THAT POINT, THOUGH THE REVISED TOTAL INCOME WAS LESSER THAN 30% OF THE BOOK PROFIT UNDER SECTION 115JA OF THE ACT, THERE WAS NO LEVY OF BOOK PROFIT TAX NOR ANY ITA. 869 /MDS/11 ICICI BANK 4 MENTION ABOUT SECTION 115JA. THEREAFTER, ASSESSING OFFICER PASSED A RECTIFICATION ORDER ON 08.01.07, WHEREIN A WORK OUT OF BOOK PROFIT UNDER SECTION 115JA OF THE ACT WAS INCL UDED. BOOK PROFIT WAS COMPUTED AT ` 33,66,07,807/-. THE WORK OUT OF THE BOOK PROFIT GIVEN IN THE SAID ORDER DATED 08.01.07 READS AS UNDER:- ` ` PROFIT AS PER P&L A/C 45,58,41,674/- ADD: PROVISION FOR INCOME TAX 14,00,00,000 PROVISION FOR STANDARD ASSET 4,75,00,0 00 PROVISION FOR WAGES 3,30 ,00,000 22,05,00,000/- 67,63,41,674/- LESS: INCOME EXEMPT UNDER CHAPTER III 33,97,33,86 7/- BOOK PROFIT 33,66,07,807/- 30% OF BOOK PROFIT 10,09,82,342/-, 3. ON 04.03.09, CIT ISSUED A NOTICE UNDER SECTION 263 OF THE ACT POINTING OUT THAT ASSESSING OFFICER WHILE WORK ING OUT THE BOOK PROFIT UNDER SECTION 115JA OF THE ACT, HAD NOT ADDED BACK EXCESS PROVISION OF INTEREST TAX AND PROVISION FOR BAD AND DOUBTFUL DEBTS. CIT ALSO NOTED THAT CAPITAL PORTION OF LEAS E RENTALS OUGHT NOT HAVE ALLOWED AS DEDUCTION IN RESPECT OF SUCH RE NTALS RECEIVED FROM RAJASTHAN STATE ELECTRICITY BOARD, KARNATAKA S TATE ELECTRICITY BOARD AND ABAN LLOYD LTD. FURTHER AS PER LD. CIT, ASSESSEE ITA. 869 /MDS/11 ICICI BANK 5 HAD NOT CALCULATED THE INTEREST PORTION ON THE LEAS E RENTALS RECEIVED FROM ONE M/S.ORJ ELECTRONICS. ASSESSEE FIL ED A REPLY TO THE SHOW-CAUSE NOTICE DATED 23.03.09. IN SUCH REPLY , IT WAS STATED THAT THERE WAS A DIFFERENCE OF ` 37,50,300/- IN THE INTEREST TAX, WHICH WAS TO BE TREATED AS PROVISION FOR APPLI CATION OF SEC.115JA OF THE ACT. HOWEVER, WITH REGARD TO THE P ROVISION FOR BAD AND DOUBTFUL DEBTS PROPOSED TO BE ADDED BACK, A SSESSEE WAS OF THE OPINION THAT IT WAS A ONLY PROVISION FOR DIMINUTION IN THE ASSETS AND COULD NOT BE ADDED BACK TO THE BOOK PROF ITS. RELIANCE WAS PLACED ON THE DECISION OF HONBLE APEX COURT I N THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. ( 305 ITR 409) . WITH REGARD TO THE INTEREST PORTION OF LEASE RENTALS, AS SESSEE POINTED OUT THAT THIS ISSUE WAS RESTORED BACK TO THE FILE O F ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ITS APPEAL FOR EARLIER YEARS. FOR THE CAPITAL PORTION OF THE LEASE RENTALS ARGUMENT O F THE ASSESSEE WAS THAT THESE CLAIMS WERE ALLOWED BY THE TRIBUNAL IN ASSESSEES APPEAL FOR THE IMPUGNED ASSESSMENT YEAR, AND UNLESS ORDER GIVING EFFECT TO SUCH DIRECTION OF THE TRIBUNAL WAS FIRST PASSED, THERE COULD BE NO REVISION. SIMILAR ARGUMENTS WERE MADE WITH RESPECT TO LEASE TRANSACTION WITH M/S.ORJ ELECTRONI CS LTD. AS WELL. ITA. 869 /MDS/11 ICICI BANK 6 4. LD. CIT AFTER CONSIDERING THE ARGUMENTS OF THE ASSESSEE, HELD BY HIS ORDER DATED 25.03.09 THAT ASSESSEE HIMS ELF HAD ADMITTED THAT ADDITION OF A PART OF INTEREST TAX WA S REQUIRED WHILE WORKING OUT THE BOOK PROFIT UNDER SECTION 115 JA OF THE ACT. IN SO FAR AS THE ISSUE REGARDING PROVISION FOR BAD AND DO UBTFUL DEBTS, CIT WAS OF THE VIEW THAT THE DECISION OF APEX COURT IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. (SUPRA) DID NO T APPLY, SINCE ASSESSEE WAS A BANKING COMPANY. VIS-A-VIS OT HER ISSUES, DIRECTIONS GIVEN BY THE CIT WAS TO CONSIDER THE DEC ISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEA RS 1995-96, 1996-97 & 1998-99 AND TO MAKE NECESSARY MODIFICATIO NS, FOR THE IMPUGNED ASSESSMENT YEAR. 5. AGAINST THE ORDER UNDER SECTION 263, ASSESSEE MOVED IN APPEAL BEFORE THIS TRIBUNAL. AS PER THE ASSESSEE, T HERE WERE TWO ORDERS DATED 05.09.06 AND 08.01.07 OF THE ASSESSIN G OFFICER, WHICH WAS SOUGHT TO BE REVISED BY LD. CIT INVOKING HIS POWERS UNDER SECTION 263 OF THE ACT. ACCORDING TO THE AS SESSEE, THESE WERE SEPARATE ORDERS AND A REVISIONARY ORDER COULD BE MADE ONLY FOR ONE ORDER AND NOT ON TWO ORDERS. THIS TRIBUN AL CONSIDERING THE CONTENTION OF THE ASSESSEE HELD THAT THE CIT HA D TO DECIDE AS TO WHICH ORDER HE WANTED TO REVISE. NEVERTHELESS, IT ITA. 869 /MDS/11 ICICI BANK 7 WAS CLEARLY MENTIONED BY THE TRIBUNAL THAT THE APPE LLATE ORDER WAS NOT STRUCK DOWN. THEREAFTER, ON 08.03.11 CIT PA SSED A FRESH ORDER WHEREIN HE AFFIRMED THAT THE REVISIONARY ORDE R DATED 25.03.09 WAS IN RESPECT OF THE RECTIFICATION ORDER DATED 08.01.07. ASSESSEE IS NOW BEFORE US ONCE AGAIN IN APPEAL. 6. AS PER THE ASSESSEE, ORDER DATED 08.01.07 WAS N OT AMENABLE TO A REVISIONARY PROCEEDINGS UNDER SECTION 263 OF THE ACT. THE ISSUE REGARDING BAD AND DOUBTFUL DEBTS WA S A SETTLED ONE. AT THE TIME, WHEN THE ORIGINAL ASSESSMENT WAS PASSED, BY VIRTUE OF THE DECISION OF APEX COURT IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD.(SUPRA), NO SUCH ADDITION COULD BE MADE. EVEN PRIOR TO THAT, CONSISTENT VIEW WAS TAKE N BY THE COURTS THAT PROVISION FOR BAD AND DOUBTFUL DEBTS WA S A PROVISION FOR DIMINUTION IN VALUE OF ASSETS AND NOT A PROVISI ON AGAINST ANY UNASCERTAINED LIABILITY. FURTHER ACCORDING TO THE ASSESSEE, THERE WAS NO JUSTIFICATION FOR SETTING ASIDE THE ASSESSME NT, ONLY THE PURPOSE OF RE-COMPUTATION OF INTEREST PORTION AND L EASE RENTALS. ACCORDING TO THE ASSESSEE, SETTING ASIDE WAS DONE O NLY ON SUSPICIONS AND SURMISES. JUST BECAUSE OF ASSESSING OFFICER WAS HOLDING A DIFFERENT VIEW, CIT COULD NOT INVOKE JURI SDICTION UNDER SECTION 263 OF THE ACT. LD. A.R SUBMITTED THAT SUB SEQUENT ITA. 869 /MDS/11 ICICI BANK 8 AMENDMENT IN LAW CANNOT BE A REASON FOR INVOKING TH E REVISIONARY PROCEEDINGS. RELIANCE WAS PLACED ON THE DECISIONS OF HONBLE APEX COURT MALABAR INDUSTRIAL CO. LTD VS. CIT ( 243 ITR 83) AND CIT VS. MAX INDIA LTD. (295 ITR 282(SC). FURTHER ACCORDING TO HIM, THE ISSUES ON WHICH REVISION WAS ADMITTED BY T HE CIT, EMANATED FROM THE ORIGINAL ASSESSMENT AND NOT FROM THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER ON 08.01.07. HENCE, ACCORDING TO HIM, FOUR YEAR TIME BARRED FOR INVOKING POWERS VESTED UNDER SECTION 263 OF THE ACT HAD ELAP SED. RELIANCE WAS PLACED ON THE DECISION OF HONBLE APE X COURT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD. ( 293 I TR 1). 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT IN THE ORIGINAL ASSESSMENT AS WELL AS SUBSEQUENT R ECTIFICATORY ORDERS PASSED UNDER SECTION 154 OF THE ACT, COMPUTA TION OF MAT LIABILITY WAS NOT DONE, EXCEPT IN THE LAST ORDER DA TED 08.01.07. WHEN IT WAS SO DONE, A NUMBER OF MISTAKES WERE COMM ITTED BY THE ASSESSING OFFICER, WHICH WERE PREJUDICIAL TO T HE INTEREST OF THE REVENUE. ACCORDING TO HIM, THE REVISIONARY PROCEED INGS DONE BY THE CIT WAS NOT ON THE ORIGINAL ASSESSMENT. AT THE TIME OF ORIGINAL ASSESSMENT, THERE WAS NO REASON FOR THE AS SESSING OFFICER TO COMPUTE THE INCOME U/S 115JB OF THE ACT, SINCE SUCH ITA. 869 /MDS/11 ICICI BANK 9 BOOK PROFIT FELL VERY BELOW THE TOTAL INCOME. ONLY DUE TO SUBSEQUENT RECTIFICATIONS BASED ON APPELLATE ORDERS , TOTAL INCOME CAME DOWN, MAKING IT NECESSARY TO COMPUTE THE BOOK PROFITS UNDER SEC.115JA OF THE ACT. THIS WAS DONE ONLY ON 08.01.07, AND THERE TOO A NUMBER OF ERRORS AND MISTAKES WERE COMMITTED BY ASSESSING OFFICER. ASSESSEE COULD NOT SAY THAT ALL THESE ASPECTS WERE CONSIDERED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS, FOR THE SIMPLE REASON, THA T THERE WAS NO COMPUTATION OF INCOME UNDER SECTION 115JA OF THE ACT, EXCEPT IN THE FINAL RECTIFICATION ORDER DT.08.01.07. THERE FORE, ACCORDING TO HIM, REVISIONARY PROCEEDINGS WERE VALIDLY INITIATED BY THE CIT. 8. WE HAVE PERUSED THE ORDERS OF LOWER AUTHORITIES AND HEARD THE RIVAL CONTENTIONS. A LOOK AT THE ORIGINAL ASSES SMENT ORDER DATED 31.03.03 CLEARLY SHOWS THAT THERE WAS NO COMP UTATION OF INCOME UNDER SECTION 115JA OF THE ACT ( IN SHORT TH E MAT PROVISION). TOTAL INCOME COMPUTED WAS ` 82,56,62,710/- UNDER THE NORMAL COMPUTATION PROVISION. ASSESSEE ITSELF HAS GIVEN A WORK OUT OF ITS BOOK PROFIT UNDER SECTION 115JA OF THE ACT, COPY OF WHICH HS BEEN PLACED AT PAGE 35 OF ITS PAPER BOOK. SUCH BOOK PROFIT, AS PER THE ASSESSEE, IS ` 33,66,07,807/- AND 30% OF SUCH BOOK PROFIT WORKED OUT TO ` 10,09,82,342/-. THEREFORE, THERE IS ITA. 869 /MDS/11 ICICI BANK 10 MUCH STRENGTH IN THE ARGUMENT OF THE D.R THAT THERE WAS NO REASON FOR HAVING A COMPUTATION OF BOOK PROFIT INCO ME, WHILE FINALIZING THE ORIGINAL ASSESSMENT. TOTAL INCOME C OMPUTED UNDER THE NORMAL PROVISION WAS SUBSTANTIALLY HIGHER. THE REAFTER, ASSESSEE HAD MOVED IN APPEAL BEFORE THE CIT(A), AND TO GIVE AN EFFECT TO THE DIRECTIONS OF CIT(A), ASSESSING OFFI CER HAD PASSED AN ORDER ON 30.07.04. EVEN IN SUCH ORDER, RECOMPU TED TOTAL INCOME CAME TO ONLY ` 13,53,83,639/-, WHICH WAS STILL HIGHER THAN 30% OF BOOK PROFIT. THEREFORE, WE CANNOT FAULT THE ASSESSING OFFICER FOR OMITTING THE WORK OUT UNDER SECTION 115 JA OF THE ACT, IN THE RECTIFICATION ORDER. NEVERTHELESS, ASSESSEE, T HEREAFTER HAD BY ITSELF REQUESTED VIDE ITS LETTER DT.21.1.06 FOR EXC LUSION OF ` 7,70,47,493/- FROM ITS TOTAL INCOME. ACCORDING T O IT, THIS WAS CAPITAL PORTION OF THE LEASE RENTAL RECEIVED BY IT. THIS CLAIM WAS ACCEPTED BY THE ASSESSING OFFICER THROUGH ANOTHER R ECTIFICATION ORDER DT.05.09.06, WHICH EFFECTIVELY BROUGHT DOWN THE TOTAL INCOME EARLIER DETERMINED ON 30.07.04 AT ` 13,53,83,639/- TO ` 5,83,36,146/-. IT IS AT THIS POINT THAT THE BOOK PROFIT COMPUTED UNDER SECTION 115JA OF THE ACT WENT SUBSTANTIALLY H IGHER THAN THE TOTAL INCOME COMPUTED UNDER THE NORMAL PROVISIONS O F THE ACT. ASSESSING OFFICER OMITTED TO CONSIDER THIS ASPECT. HENCE, ON 08.01.07, HE PASSED A RECTIFICATION ORDER WHEREBY T HE BOOK PROFIT ITA. 869 /MDS/11 ICICI BANK 11 WAS COMPUTED AND SUCH BOOK PROFIT COMPUTED CAME TO ` 33,66,07,807/-, AND 30% THEREOF CAME TO ` 10,04,82,340/-. THIS WAS THE SAME AMOUNT , WHICH WAS PROVIDED BY THE ASS ESSEE TO THE ASSESSING OFFICER. IN OTHER WORDS, THE BOOK PR OFIT WAS ACCEPTED AS WORKED OUT BY THE ASSESSEE FOR THE PURP OSE OF COMPUTATION OF INCOME UNDER SECTION 115 JA OF THE A CT. THERE WAS NO CORRESPONDENCE BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER AT ANY POINT OF ASSESSMENT PROCEE DINGS, REGARDING ANY ASPECT OF BOOK PROFIT UNDER SECTION 1 15 JA OF THE ACT. IN OUR OPINION, NON APPLICATION OF MIND BY THE ASSESSING OFFICER ON THIS ASPECT, IS CLEAR FROM THE COURSE OF EVENTS ITSELF. ASSESSING OFFICER HAD FAILED TO CONSIDER THE EFFECT OF INTEREST TAX PROVISIONS, PROVISIONS OF BAD AND DOUBTFUL DEBT, WH EN WORKING OUT THE BOOK PROFIT. NO DOUBT CIT IN THE SHOW-CAUSE NOT ICE UNDER SECTION 263 POINTED OUT THIS AS WELL AS CERTAIN OTH ER CHANGES, WHICH HE PROPOSED ON THE TOTAL INCOME COMPUTED UNDE R THE NORMAL PROVISIONS. NEVERTHELESS, IN THE FINAL ORDE R PASSED BY THE CIT BUT FOR THE ITEMS OF INTEREST TAX PROVISION AN D PROVISION FOR BAD AND DOUBTFUL DEBTS FOR COMPUTATION OF BOOK PROF IT UNDER SECTION 115 JA OF THE ACT, ON OTHER ISSUES ONLY DIR ECTIONS WERE TO GIVE EFFECT TO THE EARLIER TRIBUNAL ORDERS IN ASSES SEE'S OWN CASE ON SIMILAR ISSUES AND NOTHING MORE. IN SUCH CIRC UMSTANCES, WE ITA. 869 /MDS/11 ICICI BANK 12 ARE OF THE OPINION THAT THE REVISIONARY PROCEEDINGS INITIATED BY THE LD. CIT WAS NOT ON THE ASSESSMENT ORDER BUT ONLY O N THE RECTIFICATION ORDER DATED 08.01.07 OF THE ASSESSING OFFICER. IN FACT, THIS WAS ACCEPTED BY THE AUTHORISED REPRESENTATIVE OF ASSESSEE BEFORE THE LD. CIT. RELEVANT PARA NO.3 OF THE CIT ORDER DATED 08.03.11 WAS REPRODUCED HEREUNDER:- 3. THE MATTER WAS DISCUSSED WITH THE LD. A.R WHO AGREED WITH ME THAT THE REVISION ORDER UNDER SECTION 263 D ATED 25.03.09 IS IN EFFECT IN RESPECT OF RECTIFICATION O RDER DATED 08 TH JANUARY 2007 REFERRED ABOVE IN AS MUCH AS THE ISSU ES WHICH ARE TO BE EXAMINED AFRESH BY THE ASSESSING OF FICER IN PURSUANCE OF ORDER UNDER SECTION 263 ARE THE ISSUES ARISING FROM RECTIFICATION ORDER DATED 08.01.07. 9. AS FOR THE CONTENTION OF THE LD. A.R THAT PRO VISION FOR BAD AND DOUBTFUL DEBTS WAS A PROVISION FOR DIMINUTION I N THE VALUE OF ASSETS AND VIEW TAKEN BY THE ASSESSING OFFICER IN T HIS REGARD WAS JUSTIFIED AND CORRECT, NO DOUBT, HONBLE APEX COURT IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD.(SUPRA) HELD IT SO. NEVERTHELESS AS POINTED OUT BY THE CIT, HONB LE APEX COURT WAS CONSIDERING THE CASE OF AN ASSESSEE, WHICH WAS NOT A ITA. 869 /MDS/11 ICICI BANK 13 BANKING COMPANY. HERE, ASSESSEE IS COMING WITHIN TH E PROVISIONS OF BANKING REGULATIONS ACT. SEC.36(2) A ND SEC.36(1)(VIIA) OF THE INCOME TAX ACT CONTAINS CERT AIN SPECIFIC PROVISIONS APPLICABLE TO A BANKING COMPANY VIS--VI S ITS CLAIM FOR PROVISION. ASSESSING OFFICER HAD NOT LOOKED INTO T HIS ASPECT WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JA OF THE ACT. NON-CONSIDERATION OF PERTINENT PROVISIONS OF LAW DO ES POINT TO NON-APPLICATION OF MIND. THIS IS AN ERROR, WHICH H AS CAUSED PREJUDICE TO THE INTEREST OF REVENUE. ONCE WE CONSI DER THE REVISION TO HAVE BEEN ATTEMPTED ON THE RECTIFICATIO N ORDER DATED 08.01.07, IT IS WELL WITHIN THE TIME PERIOD FOR INI TIATING SUCH REVISIONARY PROCEEDINGS. DECISION OF HONBLE APEX COURT IN THE CASE OF ALAGENDRAN FINANCE LTD.(SUPRA) IS NOT APPL ICABLE ON FACTS HERE. OF COURSE, IN THE CASE OF MAX INDIA LTD . (SUPRA), HONBLE APEX COURT HELD THAT AMENDMENT TO LAW COUL D NOT BE A REASON FOR INVOKING THE REVISIONARY POWERS UNDER SE CTION 263 OF THE ACT. HERE, ON THE OTHER HAND, IT IS NOT ON ACC OUNT OF AMENDMENT OF LAW NOR ON ACCOUNT DECISION OF COURT T HAT REVISIONARY PROCEEDINGS WERE INITIATED. REVISIONAR Y PROCEEDINGS ARE JUSTIFIED BECAUSE OF NON APPLICATION OF MIND BY THE ASSESSING OFFICER AND ALSO SINCE THE ASSESSEE IS A BANKING CO MPANY. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE CIT WAS ITA. 869 /MDS/11 ICICI BANK 14 JUSTIFIED IN INVOKING THE POWERS VESTED ON HIM UNDE R SECTION 263 OF THE ACT. NO INTERFERENCE IS REQUIRED. 10. IN RESULT, THE APPEAL OF ASSESSEE IS DISMISSED . ORDER PRONOUNCED ON FRIDAY, 22 ND MARCH, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 22 ND MARCH, 2013 . K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 869 /MDS/11 ICICI BANK 15