2011 (9) TMI 1177 - AT - Income Tax

Summary

Issues involved: Appeal against the order of the Commissioner of Income-tax (Appeals)-V, Hyderabad for the assessment year 2004-05 regarding computation of book profit u/s. 115JB of the Income-tax Act, 1961.

Details of the Judgment:

1. Issue 1 - Computation of Book Profit:
The assessee-company, engaged in various businesses, contested the computation of book profit u/s. 115JB by the Assessing Officer, who did not consider prior period expenditure while arriving at the net profit. The assessee argued that the prior period expenditure should be included in the computation of book profit, citing relevant legal precedents such as the decision in Apollo Tyres Ltd. vs. CIT. The CIT(A) agreed with the assessee's contention, emphasizing that all items in the Profit and Loss A/c. should be considered for computing book profits. The CIT(A) directed the Assessing Officer to include the prior period expenditure in the calculation of book profit. The Tribunal upheld the CIT(A)'s decision, citing a similar precedent from the Hyderabad Bench in Gulf Oil Corporation Ltd. vs. ACIT.

2. Decision and Conclusion:
After considering the arguments and legal precedents presented by both parties, the Tribunal found no fault in the CIT(A)'s decision to include the prior period expenditure in the computation of book profit u/s. 115JB. The Tribunal upheld the CIT(A)'s order, dismissing the grounds raised by the Department and ultimately dismissing the appeal of the Department. The decision was pronounced in the Open court on 28th September, 2011.