SREI EQUIPMENT FINANCE LIMITED,KOLKATA V. DCIT, CIRCLE 11(1), KOLKATA

MA 138/KOL/2025

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The case involves SREI Equipment Finance Ltd, the appellant, who filed a miscellaneous application before the Income Tax Appellate Tribunal, Kolkata, seeking correction of a clerical error in the Tribunal's earlier order dated 15.09.2025. The error was in the misquoting of section 36(1)(viii) instead of section 41(4A) of the Income Tax Act, 1961, concerning the tax implications of amounts withdrawn from a special reserve. The Tribunal acknowledged the mistake and corrected the citation in their order, thereby allowing the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787634 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 25-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 115JB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D”BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Pradip Kumar Choubey, Judicial Member M.A No.138/Kol/2025 (In I.T.A. No.1019/Kol/2025) Assessment Year: 2017-18 SREI Equipment Finance Ltd...............................…………………….……Appellant 86C, Vishwakarma, Topsia Road (South), Topsia, Kol-46. [PAN: AAKCS3431L] vs. CIT, NFAC, Delhi.…..….........….............................................……...…..…..Respondent Appearances by: Shri S. K. Tulsiyan, Advocate, appeared on behalf of the appellant. ShriS. B. Chakraborty, JCIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 14, 2025 Date of pronouncing the order :November 19, 2025 आदेश / ORDER Per Rajesh Kumar, Accountant Member: The present miscellaneous application has been preferred by the assessee stating therein that a mistake apparent on record has occurred in the order of the Tribunal dated 15.09.2025 in relation to misquoting of section 36(1)(viii) instead of section 41(4A) of the Act. 2. The ld. AR of the assessee has pointed out a mistake in para 5.3 of the order of the Tribunal dated 15.09.2025. For the sake of ready reference the same is extracted as under: “5.3. After hearing the rival contentions and perusing the materials available on record, we find that the provisions of section 36(1)(viii) of the Act provided for creation of special reserve and deduction of the same. Section 36(1)(viii) of the Act provides for taxability of the amount withdrawn from the special reserve under section 36(1)(viii) of the Act under the head, profit and gains from the business and profession. Therefore, the amount transferred to special reserve as per section 36(1)(viii) of the Act is taxable in the year in which the amount is withdrawn from such reserve. Therefore, in our opinion, the said amount transferred to reserve under section 36(1)(viii) shall not be included in the book profit under section 115JB of the Act. If we allow the grant of reserve Printed from counselvise.com M.A No.138/Kol/2025 SREI Equipment Finance Ltd 2 to be added to the book profit, it will create several practical difficulties. Therefore, we are inclined to set aside the order of ld. CIT (A) and direct the AO to allow the said provisions while computing the book profit under section 36(1)(viii) of the Act. 3. After considering both the sides and perusing the above para we find that the section has been wrongly mentioned. Therefore the following para is substituted in place of above para: “Section 36(1)(viii) of the Act provides for creation of special reserve and deduction of same under the provision of the Act. Further, section 41(4A) of the Act provides for taxability of amount withdrawn from special reserve u/s 36(1)(viii) of the Act under the head profits and gains from business and profession, hence the amount transferred to special reserve as per section 36(1)(viii) is taxable in the year in which the amount is withdrawn from such reserve. Therefore, the amount transferred to reserve u/s 36(1)(viii) shall not be included in the Book Profit u/s 115JB of the Act”. 4. In the result, this miscellaneous petition of the assessee is allowed and our order dated 15.9.25 is modified accordingly. Kolkata, the 19th November, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rajesh Kumar] Judicial Member Accountant Member Dated: 19.11.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), Printed from counselvise.com M.A No.138/Kol/2025 SREI Equipment Finance Ltd 3 //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "