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2019 (8) TMI 1509 - ITAT MUMBAIRevision u/s 263 - assessee while computing the book profit under Section 115JB reduced the sales tax incentives and excise duty incentives from the profit declared in its Profit & Loss Account for the purposes of computing ‘Book profit’ - HELD THAT:- In the instant case, on the basis of assessment order and other records, it is evident that the assessment has been completed under normal provisions of the Act. In fact, as per the Commissioner, it is the computation of book profit under Section 115JB which is erroneous, but that has no relevance to the tax liability finally determined. In fact, as per the Commissioner, it is only after the order of CIT(A) that the relevance of computation of book profit under Section 115JB will arise, which is an aspect in the realm of future uncertainty - Commissioner was not justified in exceeding his jurisdiction under Section 263 in this case. Moreover, even if we go along with the Commissioner and accept that the computation of ‘book profit’ under Section 115JB of the Act accepted by the Assessing Officer is erroneous, yet the assessment order cannot be termed as prejudicial to the interests of the revenue, in so far as it was assessed under normal provisions of the Act. Even if addition is made in the book profit computed under Section 115JB of the Act, the same will result into equivalent MAT credit being available to the assessee, which can be utilized in subsequent assessment year. As such, at most this may lead to deferment of tax but it does not result in any loss to the revenue. Thus since there is NIL tax impact on the error noticed by the Commissioner at the time of his examination, the twin conditions of order being erroneous and prejudicial to the interests of the revenue are not satisfied on this issue and thus, the order of the Commissioner on this issue is set-aside. Excessive allowance of depreciation on the foreign exchange fluctuation loss - Quite clearly, the Assessing Officer, in the instant year, allowed the claim as a consequence of the assessment for the preceding assessment year of 2009-10. It is also not the case of the Commissioner that at the time of invoking of Section 263 by him, the assessment order for assessment year 2009-10 had been altered by any higher authority. In this view of the matter, in our view, the order of the AO qua the aforesaid aspect, cannot be said to be erroneous and prejudicial to the interests of the revenue within the meaning of Section 263 . So far as the merit of the claim of depreciation is concerned, we are not inclined to give any opinion in as much as the limited issue before us is about the jurisdiction of the Commissioner under Section 263 - only point which is required to be examined in this context is whether the Assessing Officer was required to revisit or relook at his own order for earlier assessment year while passing the order of assessment in the instant year, wherein the findings of the earlier order have merely been given effect to, as we have discussed in the earlier part of this order. Thus, on this aspect also, assessee succeeds. Amounts received on account of sales tax and excise duty incentives - assessee claimed both the incentives as capital receipts and excluded the same from its income while computing the total income as per the normal provisions of the Act - HELD THAT:- Issues raised by the Commissioner with regard to the treatment of excise duty and sales tax incentives was indeed dealt with in the course of assessment proceedings by the Assessing Officer. It is also clearly emerging that the stand of the assessee was not accepted by the Assessing Officer and the matter has travelled to the CIT(A) for consideration. AO has already treated the excise duty exemption and sales tax incentives as revenue receipts and assessed the same as income, an aspect which is in favour of the revenue. The Commissioner by invoking his revisionary jurisdiction under Section 263 of the Act also wants to treat the excise duty exemption and sales tax incentives as revenue receipts. As such there is no difference in the treatment of excise duty exemption and sales tax incentives given by the Assessing Officer and as required by the Commissioner. The only difference is that the reasoning given by the Assessing Officer and the reasoning of the Commissioner is on different footing. However, this difference does not lead to any tax impact in as much as the tax computed by the Assessing Officer and as suggested by the Commissioner will be the same. Thus, it can safely be inferred that the action of the Commissioner is tax neutral and as such, the order of the Assessing Officer cannot be said to be prejudicial to the interests of the revenue. Since in the present case the Assessing Officer has already analysed one aspect of the matter which was pending before the CIT(A), the matter cannot be again relooked by the Commissioner on any other aspect as the order of the Assessing Officer gets merged with the order of CIT(A) in view of the decision of K. SERA SERA PRODUCTIONS LTD. [2015 (5) TMI 937 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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