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TMI Blog2015 (12) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... s schedule. This reply is placed at page-20 of the Paper Book and from pages 23 to 38, we find the receipts of donation to M/s. Shantilal Shanghvi Foundation. Thus, it can be seen that in response to a specific query, the assessee has filed all the related details alongwith supporting evidences. Therefore, it cannot be said that the AO has not examined this issue during the course of assessment proceedings. The decisions relied upon by the Ld. DR are altogether on different set of facts. The AO has thoroughly examined the claim and most importantly the ratio laid down by the Hon’ble Supreme Court in the case of Apollo Tyres Ltd [2002 (5) TMI 5 - SUPREME Court ] squarely apply on the facts of the case. We, therefore, set aside the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue. The relevant observations of the Principal CIT read as under : " Scrutiny of your balance sheet and profit and loss account shows that the donation of ₹ 250,00,000/- to M/s. Shantilal Shanghvi Foundation has been debited to the Profit & Loss a/c. on payable basis. Since paying donation is not a normal business expense, expenditure on account of donation made can be debited to the P&L A/c as and when donations are paid. It cannot be debited on payable basis. Accordingly your book profit u/s. 115JB has not been prepared as per provisions of part II Schedule VI of Companies Act, 1957, and the Assessing Officer erroneously accepted the same in the above mentioned assessment order. Assessing Officer has not examined this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Book Profit u/s. 115JB of the Act. 4. Aggrieved by this, the assessee is before us. 5. The Ld. Counsel for the assessee vehemently submitted that the action of the Principal CIT is not only against the facts of the case but also against the provisions of the law. It is the say of the Ld. Counsel that the assessee being a Private Limited Company has prepared its account as per Schedule-VI Part II & III of Companies Act 1956 which is mandatory for the assessee. The Ld. Counsel further pointed out that the issues raised by the Principal CIT have been examined by the AO during the course of the scrutiny assessment proceedings. The Ld. Counsel drew our attention to the reply to the queries raised during the assessment proceedings and po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. 243 ITR 83. 7. We have given a thoughtful consideration to the rival submissions and have carefully perused the order of the Principal CIT. We have also gone through the assessment order made u/s. 143(3) of the Act. 8. The first thing which has to be considered is whether the Learned Commissioner has rightly assumed the power under section 263 of the Act. The Hon'ble Supreme Court in Malabar Industrial Co. Ltd. 243 ITR 83 has laid down the following ratio:- "A bare reading of section 263 of the Incometax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve background, we notice that the use of the words "in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act" was made for the limited purpose of empowering the assessing authority to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, an Assessing Officer under the Income-tax Act has to accept the authenticity of the accounts with reference to the provisions of the Companies Act which obligates the company to maintain its account in a manner provided by the Companies Act and the same to be scrutinised and certified by the statutory auditors and will have to be approved by the company in its general meeting and thereafter to be filed before the Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act." 11. Thus it can be seen that the only power vested upon the Revenue authorities is the power of examining whether the books of accounts are certified by the authorities under the Companies Act. It is not the case of the Principle CIT that the books of account have not been properly certified by the authorities under the Companies Act therefore the observations of the Principal CIT is not acceptable in the light of the ratio laid down by the Hon'ble Supreme Court (supra). 12. The second contention of the Principal CIT is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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