9911796707
TMI Blog2016 (7) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30.11.2006 declaring total income at 'nil' and book profit under section 115JB at Rs. 95,36,199/-. Subsequently the revised returns were filed by the assessee declaring the same results but claiming higher credit on account of TDS. In the assessment completed under section 143(3) vide an order dated 26.12.2008, the total income of the assessee was determined by the Assessing Officer at Rs. 39,87,110/-, while the book profit was computed at Rs. 1,04,49,157/-. The record of the said assessment came to be examined by the ld. CIT and on such examination, he was of the view that the order passed by the Assessing Officer under section 143(3) contained the following errors, which were prejudicial to the interest of the Revenue:- (i) Disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the period 01.04.2005 to 31.03.2006, capital gain of Rs. 1,51,80,500/- arising from sale of shares was omitted to be considered by the assessee-company. But the said capital gain was accounted for during the period from 01.04.2006 to 31.03.2007 as prior period income. 3. Accounting Standard-5, issued by the Institute of Chartered Accountants authorizes that income or expenses relating to earlier period may be adjusted in the later year as Prior Period income /expenses if there was any error or omission or exceptional circumstances. The capital gain of Rs. 1,51,80,800/- which actually arose during the period relevant to assessment year 2006-07 but omitted to be considered through inadvertence was therefore accounted for in the immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on this issue. 5. The explanation offered by the assessee in respect of all the three errors allegedly pointed out by him in the order of the Assessing Officer was not found acceptable by the ld. CIT. According to him, the treatment of profit arising from the sale of shares of M/s. Apeejay Finance Group Limited as given by the assessee was not in accordance with Part II & III of Schedule 6 of the Companies Act and it was thus a case of misrepresentation of accounts by the assessee with a view to reduce the book profit for the year under consideration. He held that this profit was required to be added while computing the book profit and the order of the Assessing Officer on this issue was erroneous as well as prejudicial t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, i.e. A.Y. 2006-07. As regards the other error allegedly pointed out by the ld. CIT in the order of the Assessing Officer in not making addition on account of profit arising from the sale of shares of M/s. Apeejay Finance Group Limited while computing the book profit under section 115JB, the ld. counsel for the assessee reiterated before us the submissions made on behalf of the assessee before the ld. CIT during the course of proceedings under section 263. He also submitted that this issue was duly examined by the Assessing Officer during the course of assessment proceedings and invited our attention to the relevant portion of the assessment order to show that the same was decided by the Assessing Officer after such examination by appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The ld. D.R., on the other hand, submitted that the treatment given by the assessee in not crediting the profit arising from the sale of shares of M/s. Apeejay Finance Group Limited to the Profit & Loss Account for the year under consideration was not as per the Companies Act as rightly pointed out by the ld. CIT in his impugned order passed under section 263 and there was thus a clear error in the order of the Assessing Officer in not adding the same while computing the book profit of the assessee under section 115JB. He contended that there was thus a clear omission on the part of the assesese in not including this amount in the book profit and the assessee cannot be allowed to take benefit of such omission. 8. We have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit reflected in the Profit & Loss Account, which is duly audited and presented before the A.G.M., cannot be tinkered with except by way of adjustments, which are permissible as per Explanation to Section 115JB. It is an undisputed position that the adjustment on account of profit arising from sale of shares, which was not credited to the Profit & Loss Account of the assessee-company is not covered by such Explanation. Moreover, it is also pertinent to note that this issue was examined by the Assessing Officer during the course of assessment proceedings and the claim of the assessee thereon was accepted by the Assessing Officer on such examination by applying his mind, as is evident from the relevant observations recorded by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
