9911796707
TMI Blog2023 (2) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... nt respectfully submits that the order of the commissioner of Income Tax (Appeals) - 14, Chennai - 600 034 in ITA No.133/CIT(A)-14/2013-14 dated 06/11/2019 is contrary to law and facts prevailing in the case of the appellant for the Asst. year 2008-09, and is against all canons of law, equity and justice. 2. The appellant submits that the Learned Commissioner of Income Tax (Appeal) ought to have appreciated the fact that the issue before him for adjudication was the computation of book profits for the purpose of MAT under the provisions of sec.115JB of the IT Act 1961 and not the computation of income for assessment purposes under the normal provisions of the IT Act 1961. 3. The appellant submits that the book loss for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration for the purpose of book profits under the provisions of section 115 JB of IT Act as the Accounting Standards recognize income only when such income has accrued during the previous year. 7. The appellant submits that the Accounting Standards allows debiting prior period expenses to the profit & loss account of a subsequent year to compute the profit or loss for the said year. The Accounting standard 5 does not stipulate that the above adjustment has to be made after arriving at the Net profit or loss of the year under consideration, as decided by the CIT(Appeal). The disallowance of prior period expenses while computing the book profit u/s.115JB of the IT Act 1961 does not come within the purview of the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod expenses while computing book profit amounting to Rs.29,85,478/-. During the second round of assessment proceedings in consequent to directions of the Ld.PCIT u/s.263 of the Act, the AO has completed assessment and determined total income under book profit at Rs.55,06,502/- by making additions towards income admitted to claim TDS Credits and disallowance of prior period expenses. The assessee carried the matter in appeal before the First Appellate Authority, but could not succeeded. The Ld.CIT(A) for the reasons stated in their appellate order dated 06.11.2019, rejected the arguments of the assessee and sustained the additions made by the AO. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. 4. The Ld.Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with Part-II & III of Schedule-VI to the Companies Act, 1956 and thus, the AO has rightly re-computed book profit and their orders should be upheld. 6. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The provisions of Sec.115JB of the Act, deals with computation of book profit. Explanation (1) to Sec.115JB of the Act, provides for certain positive and negative adjustments. It is a well settled principle of law by the decision of various courts, including the Hon'ble Supreme Court in the case of CIT v. Apollo Tyres Ltd., reported in [2002] 255 ITR 273 (SC) that if financial statements are prepared in accordance with the provisions Part-II & III of Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomers as liability in the books of accounts pending recognition of income in subsequent financial years, it cannot be said that the assessee has not followed the provisions of Companies Act, 1956, more particularly, Part-II & III of Schedule-VI of Companies Act, 1956 while preparing its accounts. Therefore, we are of the considered view that on this issue, the AO cannot make any adjustments to re-compute book profit u/s.115JB of the Act, because said item does not come under any of the items of adjustments specified in Clause (a) to (f) of Explanation (1) to Sec.115JB of the Act and thus, we direct the AO to delete additions made towards income admitted to claim TDS Credits while computing book profit u/s.115JB of the Act. 8. As regards ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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