9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 56 - AT - Income TaxCIT(A) admitting additional ground - Addition u/s. 115JB - attributable to provision for FBT - whether CIT(A) has erred in admitting additional ground of appeal that the assessee has erred in not reducing the amount on account of provision of FBT for the purpose of calculation of book profit under s. 115JB ignoring the fact that the assessee itself has added back the amount on account for tax which included an amount attributable to provision for FBT for the purpose of calculating book profit under s. 115JB? HELD THAT - We find that in the case of Jute Corporation of India Ltd. 1990 (9) TMI 6 - SUPREME COURT Hon ble apex Court was dealing with powers of AAC and it was held that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restriction and limitation if any prescribed by the statutory provisions. In the present case CIT(A) has admitted the additional ground after making this observation that the additional ground is being admitted in the interest of justice. Hence we feel that learned CIT(A) has properly admitted the additional ground raised by the assessee and hence we reject the ground raised by the Revenue before us. Whether the term income-tax includes FBT also? - From the definition of the term tax we find that the term tax is a wider term than the term income-tax . The term tax includes income-tax as well as FBT . By the Finance Act 2005 w.e.f. 1st April 2006 there is an amendment in s. 2(43) and in the definition of tax in addition to income-tax and super tax chargeable under the provisions of IT Act 1961 FBT was also added payable under s. 115WA - This definition of the term tax proves beyond doubt that the term tax includes both income-tax as well as FBT and hence the term income-tax cannot include the term FBT . When there was amendment made in s. 2(43) by the Finance Act 2005 w.e.f. 1st April 2006 no amendment was made in cl. (a) of Explanation to s. 115JB by either including the term FBT in addition to the term income-tax or by substituting the words income-tax by the term tax and thereby bringing FBT also within the purview of cl. (a) of Explanation to s. 115JB. We have seen that in the present case the provisions of Expln. 1 to s. 115JB are clear and as per these provisions payment or provision for FBT is not required to be added back for the purpose of computing book profit under s. 115JB of the Ad because we have seen that the term used in this clause of Explanation is income-tax which docs not include FBT and in spite of this fact that there is a term tax already on the statute book which includes FBT also the legislature has not used that term and has used the term income-tax in Explanation to s. 115JB. Hence for this decision help of any Board s circular or Explanatory Note is not required and therefore this contention of the learned Departmental Representative of the Revenue has no relevance in the present case because in the present case the assessee deserves to succeed on the basis of the provisions of s. 115JB of the Act without any help from the Board s circular or Explanatory Note. We therefore decide this issue in favour of the assessee.
Issues:
1. Deletion of addition under s. 115JB for provision of FBT. 2. Admission of additional ground by learned CIT(A) regarding provision for FBT. 3. Interpretation of the term "income-tax" in Explanation to s. 115JB and its applicability to FBT. Analysis: 1. The case involved a Revenue's appeal against the deletion of an addition of Rs. 24,30,000 under s. 115JB for provisions of FBT. The assessee had initially shown a book profit of Rs. 69,65,036, which was later assessed at Rs. 90,15,558 by the AO due to additions for doubtful debt and gratuity provisions. The CIT(A) deleted these additions, and the Revenue did not challenge them. The assessee then raised an additional ground before the CIT(A) regarding the reduction of Rs. 24,33,000 for FBT provision in the book profit calculation. The CIT(A) admitted this ground based on Board Circular No. 8 of 2005, which stated that FBT debited to P&L account cannot be added to book profit. The Revenue appealed this decision. 2. The Revenue contended that the CIT(A) erred in admitting the additional ground related to the provision for FBT. However, the Tribunal cited the Supreme Court's ruling in the case of National Thermal Power Co. Ltd. vs. CIT, emphasizing that legal questions can be raised at any stage if all facts are on record. The Tribunal upheld the CIT(A)'s decision to admit the additional ground in the interest of justice, following the principles laid down by the Supreme Court regarding the appellate authority's powers. 3. The Tribunal analyzed the term "income-tax" in the Explanation to s. 115JB to determine if it includes FBT. The definition of "tax" in s. 2(43) clarified that "tax" encompasses both "income-tax" and "FBT." However, the legislative language in s. 115JB specifically referred to "income-tax" without incorporating "FBT." The Tribunal highlighted that the absence of an amendment to include FBT in the Explanation indicated that FBT provisions need not be added back for computing book profit under s. 115JB. Additionally, the Tribunal noted that while FBT was disallowed as a deduction under s. 40(a)(ic), there was no provision for adding it back in the Explanation to s. 115JB. Hence, the Tribunal ruled in favor of the assessee, dismissing the Revenue's appeal and affirming the CIT(A)'s decision. This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by the parties, and the Tribunal's reasoning in arriving at its decision.
|
