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Appeal against rejection of assessee's application under section 154 regarding "chargeable profits" under section 115J of the Income-tax Act, 1961. Analysis: The appeal was directed against the rejection of the assessee's application under section 154 concerning the computation of "chargeable profits" under section 115J. The assessee computed book profits for section 115J purposes at Rs. 1,52,99,221, with three items totaling Rs. 91,88,547 not debited to the profit and loss account. The Assessing Officer accepted this figure under section 143(1)(a) but rejected the application under section 154 to exclude the three items. The CIT(A) upheld this decision, leading to the appeal before the tribunal. The assessee argued that the three items were mistakenly added to the net profit, as they were not debited to the profit and loss account but directly reflected in the balance sheet. The counsel referred to audited accounts and CBDT Circular No. 549 to support this claim. The department contended that only arithmetical errors could be rectified under section 143(1)(a), and the case did not fall under this category. After reviewing the submissions, the tribunal found merit in the assessee's arguments. It noted that the three items were not debited to the profit and loss account but directly reflected in the balance sheet, as evidenced by the audited accounts. The tribunal highlighted the importance of correctly computing taxable income and providing relief to entitled parties. It referenced proviso (ii) to section 143(1)(a) and emphasized the responsibility of the Assessing Officer to allow prima facie admissible items. The tribunal directed the Assessing Officer to modify the intimation under section 143(1)(a) by excluding the three items, as the provisions of section 115J were clear regarding the computation of book profits. In conclusion, the tribunal allowed the appeal, emphasizing the importance of accurately computing taxable income and providing relief to the assessee where applicable.
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