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TMI Blog2018 (3) TMI 1564X X X X Extracts X X X X X X X X Extracts X X X X ..... ed back while arriving at Book Profits u/s 115JB. The adjustment of impugned item as suggested by Ld. CIT was not legally tenable in law which leads us to inevitable conclusion that the omission to carry out the said adjustment did not result into any loss of revenue. Therefore, one of the prime condition viz. prejudicial to interest of revenue to invoke the revisional jurisdiction under the provisions of Section 263 has remained unfulfilled in the present case - Decided in favour of assessee - I.T.A. No.3625/Mum/2017 - - - Dated:- 14-2-2018 - Shri Joginder Singh, JM and Shri Manoj Kumar Aggarwal, AM Assessee by : Ketan K Ved, Ld.AR Revenue by : Narendra Singh Jangpangi, Ld. CIT DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) The captioned appeal by assessee for Assessment Year [AY] 2012-13 contest the invocation of revisional jurisdiction u/s 263 by the Ld. Commissioner of Income Tax (LTU), Mumbai [CIT] on 29/03/2017 by raising the following grounds of appeal:- 1.1 The Commissioner of Income tax has erred in perfunctorily (as pointed out in detail in the annexure hereto) passing an Order u/s.263 of the Income Tax Act, 1961. 1.2 The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores under normal provisions and u/s 115JB respectively. 2.2 Subsequently, the said assessment order was subjected to exercise of revisional jurisdiction u/s 263 by Ld. CIT vide show cause notice dated 09/11/2016 on the premises that corresponding adjustment of certain employee benefits expenses of ₹ 11.91 Crores being tax borne by the assessee on deemed perquisites on the value of accommodation provided to employees and which were not admissible u/s 40(a)(v), was omitted to be carried out while arriving at book profits u/s 115JB. Therefore, the order being erroneous and prejudicial to the interest of the revenue, required revision u/s 263. Accordingly, after providing due opportunity of being heard to the assessee, Ld. CIT directed Ld. AO to re-compute Minimum Alternative Tax [MAT] u/s 115JB and raise demand against the assessee for the same. Aggrieved by the directions of Ld. CIT, the assessee has by way of the appeal, challenged invocation of revisional jurisdiction u/s 263. 3.1 The arguments raised by Ld. Counsel by Assessee [AR], before us, are two folds. The Ld. AR contended that Ld. AO duly appreciated the computation u/s 115JB during original assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any mind thereupon and adopted the same as such without any iota of discussion in the quantum assessment order. Prima facie, we are of the opinion that this is a case of no inquiry by Ld. AO and not the case of inadequate inquiry or Lack of Inquiry or adoption of one of the possible views as stressed by Ld. AR during hearing before us and therefore the various case laws relied upon by Ld. AR in this regard could not help assessee in any manner. We also note the statutory provisions as contained in Section 263 including Explanation-2 creates a deeming fiction that the order of Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue if, in the opinion of Ld. CIT the order is passed without making inquiries or verification which should have been made. 7. With this, the only question that survives for our consideration is that whether the omission to carry out the stated adjustment in the Book profits as envisaged by Ld. CIT has made the quantum order erroneous and prejudicial to the interest of the revenue and whether the stated adjustment as suggested by Ld. CIT was tenable in law or not ? In other words, we are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly appear below the line in the profit and loss account should be added back to arrive at the book profit if they appear above the line in the profit and loss account. Section 115JB has not specifically provided for add back of some such below the line items like deferred tax, dividend distribution tax, etc. as they were thought to be included in the term income-tax . However, there has been some ambiguity regarding add back of these items, if debited to profit and loss account. With a view to clarifying the intention, a new clause has been inserted after clause (g) of the Explanation 1, as so numbered, so as to provide that the book profit shall be increased by the amount of deferred tax and the provision thereof, if debited to profit and loss account. Further, it has also been clarified that the amount of income tax shall include,- (i) tax on distributed profits under section 115-O or distributed income under section 115R; (ii) any interest charged under this Act; (iii) surcharge, if any, as levied by the provisions of the Central Acts from time to time; (iv) Education Cess on income-tax, if any, as levied by the Central Acts from time to time; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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