9911796707
TMI Blog2012 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... es, we feel no substantial question of law arises in the present appeal. 2. The Assessing Officer vide order dated 15.3.2005 had assessed total income of the assessee at Nil under Section 143(3) of the Act. Subsequently, notice under section 154 of the Act was issued and a rectification order dated 21.07.2006 under the said Section was passed recording:- "After going through the records it was found that while computing book profit the assessee had claimed prior period adjustment for Rs.3,74,59,471/- which was inadmissible nature. In compliance to this office notice u/s 154 of the Act dated 22.11.2005, the assessee has filed its reply dated 22.02.2006, which is placed on record. The assessee has submitted that calculation of book pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in rectifying the said mistake through aforesaid order passed u/s 154 of the I.T. Act. Various decisions which are relied upon by Sh. Taneja are having different facts and, therefore, under the facts of present case these cannot be applicable. With this discussion, the rectification order passed by AO is hereby confirmed by rejecting relevant grounds of appeal." 4. It is noticeable from the aforesaid findings of the Assessing officer and the CIT(Appeals) that the respondent-assessee was following the straight line method of depreciation under the Companies Act, 1956, prior to the assessment year 2002-03. However, in the year in question, it changed the method to written down value method and the difference due to the said change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as CIT(Appeals). They have not indicated or specifically stated how and why the issue was clear and that no debate or two views were possible. The contention of the assessee, which has been referred to by the Tribunal in the impugned order, shows that there was considerable controversy on the said aspect and this is clear when we read the following paragraph from the order of the Tribunal:- "As to whether the arrears of depreciation can be provided or not, the matter is settled by various decisions of the Tribunal as also by the decision of the Bombay High Court in the case of Kinetic Motor Co. Limited 262 ITR 330 wherein also there was a change in the method of providing depreciation and the profits of the assessee were lowered by Rs.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also not res Integra and the Tribunal in the case of Gulf Oil Corporation Limited vs. ACIT 111 ITR 124 dealt with the issue by observing as under: "6. We have duly considered the rival submissions and material on record. Sub-section (2) of Section 115JB provides that every assesses company shall prepare its profit and loss account in accordance with the provisions of Part-II and Part-III of Schedule VI to the Companies Act, 1956. The said Schedule-VI does not speak of the Appropriation Account at all. It is only as a matter if presentation that most of the companies segregate to reflect as to what has been appropriated where out of the profits earned by them. Otherwise, sub-clauses (a) and (b) of clause (viii) of Note-II in para 3 of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is permitted by law and also as laid down by the Supreme Court in the case of Apollo Tyres Ltd. (supra). None of the clauses given in the Explanation provide for the increase or decrease of the book profi8ts (sic.) by extraordinary items. The reference of AS-5 by the learned Department Representative does not in any manner advance the case of the revenue. It merely says that prior period and extraordinary items should be separately disclosed along with their nature so that their impact on the operating results can be perceived. It does not say that they are not part of the Profit and Loss Account. Similarly, the Guidance Note issued by the ICAI also does not help the revenue as it merely says that sometimes, Appropriation Account is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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