2021 (8) TMI 465 - AT - Income Tax

Assessment u/s 153A - MAT computation u/s 115JB - CIT(A) confirming the action of the DCIT not allowing the exclusion of the Sales Tax Subsidy from the Book Profits for the purpose of MAT Computation - HELD THAT - This issue of claim of the assessee that the sales tax subsidy being a capital receipt should be reduced from book profit computation u/s 115JB was subject matter of assessee s appeal with ITAT in the course of regular assessment for AY 2006-07. The assessee had raised this issue by way of CO and ITAT has duly decided this issue in favour of assessee - the present case before us is assessment u/s 153A of the Act pursuant to search and assesee is himself claiming that this is a case of non abated assessment. It is noted that assessee has not made any such claim in the return filed pursuant to notice u/s 153A - It has also not filed any revised return in this regard. The claim was rejected by Ld.CIT(A) on the touchstone of Hon ble Rajasthan High Court decision in the case of Jai Steel India 2013 (6) TMI 161 - RAJASTHAN HIGH COURT that in case of non abated assessment fresh claim cannot be allowed. We do not find any infirmity in the order of Ld.CIT(A). Hence, we uphold the same.

Issues:
1. Exclusion of Sales Tax Subsidy from Book Profits for MAT computation.
2. Allowance of depreciation on loss from cancellation of foreign currency forward contracts.
3. Allowance of consequential depreciation on loss incurred during FY 2004-05.
4. Consideration of increased written down value of assets from merged companies for depreciation.
5. Treatment of sales tax incentive/concession as capital receipt.
6. Disallowance under section 14A for computing Book Profit under section 115JB.
7. Recomputation of Book Profit by reducing amount transferred to Debenture Redemption Reserve.
8. Recomputation of interest under section 234B.
9. Recomputation of interest under section 234C.

Exclusion of Sales Tax Subsidy from Book Profits for MAT computation:
The assessee claimed exclusion of Sales Tax Subsidy from book profits for MAT computation, which was not made during original assessment but raised during reassessment proceedings u/s 153A. The Ld.CIT(A) dismissed the claim citing precedents that fresh claims in non-abated assessments cannot be allowed. The ITAT upheld the Ld.CIT(A)'s decision as the claim was not made in the return filed under section 153A.

Allowance of depreciation on loss from cancellation of foreign currency forward contracts:
The issue of allowing depreciation on loss from cancellation of foreign currency forward contracts was raised by the revenue. The ITAT noted that no incriminating material was found on this issue during the search, and hence, the assessment was non-abated. The ITAT upheld the Ld.CIT(A)'s decision to grant relief on this issue.

Allowance of consequential depreciation on loss incurred during FY 2004-05:
The ITAT upheld the Ld.CIT(A)'s decision to grant consequential depreciation on the loss incurred during FY 2004-05, as no incriminating material was found during the search, making the assessment non-abated.

Consideration of increased written down value of assets from merged companies for depreciation:
The ITAT upheld the Ld.CIT(A)'s decision to allow the consideration of the increased written down value of assets received from merged companies for depreciation, as the assessment was non-abated.

Treatment of sales tax incentive/concession as capital receipt:
The ITAT upheld the Ld.CIT(A)'s decision to treat the sales tax incentive/concession as a capital receipt, as no incriminating material was found during the search, making the assessment non-abated.

Disallowance under section 14A for computing Book Profit under section 115JB:
The ITAT upheld the Ld.CIT(A)'s decision to disallow the disallowance under section 14A for computing Book Profit under section 115JB, as no incriminating material was found during the search, making the assessment non-abated.

Recomputation of Book Profit by reducing amount transferred to Debenture Redemption Reserve:
The ITAT upheld the Ld.CIT(A)'s decision to recompute the Book Profit by reducing the amount transferred to Debenture Redemption Reserve.

Recomputation of interest under section 234B and 234C:
The ITAT upheld the Ld.CIT(A)'s decision to recompute the interest under section 234B and 234C based on the returned income, as the issues were covered in favor of the assessee by the ITAT decision for AY 2006-07.

In conclusion, the ITAT dismissed both appeals and upheld the Ld.CIT(A)'s decisions on all issues raised by the parties.

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