2011 (9) TMI 1043 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A)-10, Mumbai's Order regarding wealth tax payment, head office expenses, interest u/s. 234D, applicability of section 115JB to a bank, and MAT provisions for a banking company.

Wealth Tax Payment Disallowance:
The Revenue appealed against the deletion of the disallowance of wealth tax payment while computing book profit u/s. 115JB of the I.T. Act. The CIT(A) held that wealth tax is not included in income tax, citing relevant case law. The ITAT confirmed the CIT(A)'s decision based on legal precedents and rejected the Revenue's appeal.

Head Office Expenses Disallowance:
The Revenue also challenged the deletion of the disallowance of head office expenses while computing book profit u/s. 115JB. The CIT(A) ruled that the Assessing Officer lacked authority to recast profits as per books without valid reasons, following the decision in Apollo Tyres Ltd. The ITAT upheld the CIT(A)'s decision, as the Revenue failed to provide contrary evidence, confirming the deletion of the disallowance.

Interest u/s. 234D:
Regarding interest u/s. 234D, the CIT(A) held that it should not be charged for a specific assessment year due to prospective operation of the amendment. The ITAT found no fault in the CIT(A)'s decision, as the Revenue did not present opposing arguments, leading to the rejection of the Revenue's appeal on this ground.

Applicability of Section 115JB to Bank:
The assessee contended that section 115JB provisions are not applicable to a bank. The ITAT directed the Assessing Officer to reconsider this matter in line with the decision of the ITAT, Mumbai Bench, supporting the assessee's position. The cross-objection filed by the assessee was treated as allowed for statistical purposes.

MAT Provisions for Banking Company:
The cross-objection raised the issue of MAT provisions not being applicable to a banking company, supported by a decision of the ITAT, Mumbai Bench. The ITAT directed the Assessing Officer to review the matter in compliance with the law, resulting in the cross-objection being treated as allowed for statistical purposes.

General Grounds:
Two general grounds raised by the Revenue were deemed not to require separate consideration.

In conclusion, the ITAT dismissed the Revenue's appeal and allowed the cross-objection filed by the assessee on the MAT provisions issue, directing a reconsideration by the Assessing Officer. The Order was pronounced on 28-09-2011.