9911796707
TMI Blog2001 (1) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed." 2. Assessment in this case was originally completed by the Assessing Officer under section 143(3) of the Act, by his order dated 30-12-1991. Income computed under that order was Rs.50,43,630. Income has been thus determined after making various additions by the Assessing Officer. In the said assessment order, the Assessing Officer has also worked out the income taxable under section 115J of the Act, with reference to the book profits of the assessee. Section 115J income was worked out at Rs.5,45,765. Since the income computed under the regular provisions was more than the income computable under section 115J of the Act, the Assessing Officer ignored the income computed under section 115J and determined the income on the basis of regular computation for assessment. This assessment was taken up in first appeal before the CIT(A). The CIT(A) granted reliefs in the context of various grounds raised by the assessee and directed the Assessing Officer to modify the assessment in terms of his appellate order. 3. The Assessing Officer thereupon, passed the relevant modified assessment order dated 8-10-1992, for giving effect to the order of the CIT(A). As per that modification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer was guided by the decision of the Andhra Pradesh High Court in the case of Dy. CIT v. Surana Steels (P.) Ltd. [1994] 207 ITR 508 at the relevant time, the said judgment of the Andhra Pradesh High Court has been reversed by the Hon'ble Supreme Court in Surana Steels (P.) Ltd v. Dy. CIT [1999] 237 ITR 777, whereby the assessee is entitled to set off of unabsorbed depreciation carried forward from the earlier assessment years, while computing the book profits under section 115J of the Act. In this view of the matter, he submitted that the taxable income computed under section 115J would be less than the regular income, as modified by the Assessing Officer at the instance of the order of the CIT(A) in the context of the original assessment. He further submitted that the findings and observations of the lower authorities that the assessee has not objected to the computation of book profits under section 115J made in the course of original assessment is not proper, because the regular income assessed by the Assessing Officer in the original assessment was higher than the income computed under section 115J, and therefore, the assessee had no occasion to contest the computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f book profits computed in that order in terms of section 115J of the Act. Therefore, that matter stood concluded there. When the Assessing Officer modified the original assessment order, as a result of the directions given by the CIT(A), the Assessing Officer has made an inadvertant omission and failed to consider the book profit under section 115J computed in the original assessment order. Therefore, he initiated proceedings under section 154, to rectify the modified assessment. In the modified order dated 5-10-1994 ultimately the Assessing Officer has merely replanted the income computed in terms of section 115J, for assessment, as it was higher than the income as per regular provisions of the Act. Since the computation of income in terms of section 115J was already available on record, omission of the Assessing Officer to take note of the same, while passing the first modification order to give effect to the directions of the CIT(A) was a mistake apparent from record, and as such, he was very much justified in invoking the provisions of section 154 and passing the second modification order dated 5-10-1994. At the same time, since the assessee has not questioned the computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted upon, till the Assessing Officer invoked the provisions of section 154 for rectifying the first modification order passed on 8-10-1992, assessee never had opportunity to question the correctness of the computation made in terms of section 115J in the original assessment order. It is only on account of the reliefs granted by the CIT(A) in the appellate proceedings against the order of assessment originally made, the ultimate income assessable under the regular provisions of the Act fell below the profit computed originally under section 115J of the Act. As such, in the normal course, while passing the modification order dated 8-10-1992 to give effect to the order of the CIT(A), the Assessing Officer should have considered the applicability of the profit in terms of section 115J and income in relation thereto for assessment. But, at this stage, there was omission on the part of the Assessing Officer to consider the applicability of income in terms of section 115J. The first modification order dated 8-10-1992 was silent on that aspect. It was only when that omission came to light, that the Assessing Officer invoked the provisions of section 154 to recomplete the assessment going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on its merits. 9. But, even if the lower authorities would have gone into the objections of the assessee with regard to the merits of the computation of book profits in terms of section 115J, their decision would have gone against the assessee only, as at the relevant points of time, the issue relating to the method of computation of book profits in terms of section 115J was covered by the jurisdictional High Court in the case of Surana Steels (P.) Ltd. which was against the assessee. The latest decision of the Supreme Court in Surana Steels (P.) Ltd.'s case, was rendered only in 1999, long after the passing of second modification order under section 154 by the Assessing Officer and the impugned appellate order by the CIT(A). But, as of now, the decision of the Hon'ble Supreme Court in Surana Steels (P.) Ltd.'s case, which is in favour of the assessee is governing the point at dispute. Since there is no hitch in the way of the assessee, in seeking redressal of its grievance against the computation of book profits in terms of section 115J before this Tribunal, the assessee has a right to pursue this appeal on the merits of computation under section 115J made by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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