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TMI Blog2024 (3) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of parts II and III of the Schedule VI of the Companies Act, 1956 and there was nothing on record to suggest that the book profits were contrary to such provisions or not in consonance with such provisions. In view of the conclusion arrived at by the Tribunal that such inclusion of the disclosure made by the assessee company would require long drawn reasoning and debate and therefore, when the issues and contentions being debatable on uncertainty, the Assessing Officer could not have invoked the power under Section 154 of the Act for rectification of the mistake apparent on record. The Tribunal, therefore, was right in observing that the action of the Assessing Officer as well as the CIT(A) under Section 154 of the Act was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 133A of the Act was carried out on 23rd June 2011. During the course of survey, the assessee company declared additional income of Rs. 17 Crores. It was reflected in the scrutiny Note-35 of the financial statement for A.Y. 2012-13 relevant to F.Y. 2011-12 as the assessee declared such additional income amounting to Rs. 17 Crores. [5] The assessee company had re-worked tax benefits for A.Y. 2011-12 resulting into additional tax liability of Rs. Nil, after adjusting MAT credit entitlement of Rs. 9,04,26,348/- and thereby, changing tax base from MAT to normal taxation. However, the amount of Rs. 17 Crores was not recorded in the books of account and therefore, the Assessing Officer issued notice under Section 154 of the Act on 20th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact on record, came to the conclusion that without any incriminating material found, the amount of disclosure could not have been necessarily included in the profit and loss account / book profit as such inclusion would require a long drawn reasoning and debate. [9] Learned advocate Mr. Nikunt Raval for the appellant Revenue submitted that the CIT(A) has relied upon and referred the decision of the Hon ble Bombay High Court in the case of Blue Star Engineering Co. (Bombay) (P) Ltd vs. Commissioner of Income-tax reported in [1969] 73 ITR 283 (Bombay), wherein the Hon ble Bombay High Court has analyzed the power under Section 154 of the Act to rectify an error apparent on the face of the record. It was submitted that the amount of discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon ble Calcutta High Court in the case of Principal Commissioner of Income-tax vs. Lanshree Products and Services Ltd reported in [2023] 150 taxmann.com 389 (Calcutta), wherein the Hon ble Calcutta High Court, in similar facts, held relying upon the decision of the Hon ble Supreme Court in the case of T.S. Balaram, ITO vs. Volkart Brothers reported in [1971] 82 ITR 50, that it was not open to the Income Tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Act. [12] Considering the submissions made by the learned advocates appearing for the parties and the facts of the case, we are in agreement with the reasoning given by the Tribunal for allowing the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Ld. Counsel for the 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. [13] The Hon ble Delhi High Court in the case of I.T.C.L. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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