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TMI Blog2023 (3) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ial and without any clue about the nature of the disclosure also, the same could not be said to invariably represent undisclosed income/profits of the assessee to be included in its profit and loss account. The assessee at its discretion may include the surrender in its income for paying taxes thereon, but this fact ipsodixit will not mandate inclusion of the surrender in its Book Profits also. Therefore it is not plain and simple that the surrender made during survey, on adhoc basis without any incriminating material found, was to be necessarily included in its profit and loss account/ book profits. We agree with assessee that to arrive at such a conclusion required a long drawn process of reasoning and debate. For the above reasons therefore, we hold, that the non- inclusion of surrendered income in the Book Profits of the assessee as per section 115JB of the Act, was not a patent error amenable to rectification u/s 154 of the Act.The adjustment so made, therefore, is directed to be deleted. Decided in favour of assessee. - ITA No.1497/Ahd/2019 - - - Dated:- 13-3-2023 - Smt.Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the action of the Id. AO in making an addition of Rs.17,00,00,000/- to the book profits u/s. 115JB of the Act by going behind the net profits of the Appellant which is outside the purview of the provisions of section 115 JB of the Act. 3. As transpires from the orders of the authority below, the rectification made by the AO in the impugned case was in relation to adjustment made to the book profits of the assessee by adding thereto amount of income surrendered by the assessee during survey of Rs.17 crores .The AO had noted that while the assessee had included the surrendered income for the purpose of computing its income for taxation as per the normal provision of the Act, but had not done so for the purpose of paying tax under MAT regime on the book profits of the assessee as per the section 115JB of the Act. It was noted that the assessee, while so including surrendered income of Rs.17 crores in its income computed as per the normal provisions ,had claimed benefit of MAT credit against the taxes leviable on the income computed as per the normal provision on account of having paid taxes on the book profits in the preceding years. The AO noted that the assessee had paid ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its of its exempt units for all three assessment years i.e. Asst.Year 2009-10, 2010-11 and 2011-12. The AO notes that the assessee submitted unit-wise computation of income during the assessment proceedings, and added an amount of Rs.1018.34 lakhs towards reallocation of raw- material prices and overheads from exempt units to taxable units and disclosed under the head business income ; that in addition to the same, the assessee disclosed Rs.1700 lakhs as income from other sources and added the same to its total income. These facts are noted at para-4 of the assessment order which are reproduced hereunder: Assessee has disclosed this income in the computation and has also submitted the unit wise computation of income during the course of the assessment proceedings. In this computation, the assessee has added Rs.1018.34 lacs towards reallocation of raw material prices and overheads from exempted units to taxable units under the head business income. In addition to this, the assessee also disclosed Rs.1700 lacs as income from other sources and added the same to total income. 6. What emanates from the above therefore is that the assessee on account of survey action c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of 2013); or (b) being a company, to which the second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013) is applicable, shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of the Act governing such company: Provided that while preparing the annual accounts including statement of profit and loss, (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including statement of profit and loss and laid before the company at its annual general meeting in accordance with the provisions of section 129 of the Companies Act, 2013 (18 of 2013) : Provided further that where the company has adopted or adopts the financial year under the Companies Act, 2013 (18 of 2013), which is different from the previous year under this Act, (i) the accounting policies; (ii) the accounting standards adopted for ..... 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