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TMI Blog2024 (6) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee thus submits that in the absence of escapement qua book profits, the escapement alleged under normal provisions are of no consequence since despite the purported escapement qua normal provision may led to enhancement of taxable income under normal provision, the tax liability thereon would be lower than the book profits assessable in law. On facts thus, the assessee argues that tax liability on book profits under s. 115JB amounting to Rs. 31,04,38,156/- [ without provision for repair which adjustment is impermissible in reassessment proceedings] exceeds the tax liability on Rs. 13,67,21,152 [ income assessed earlier under s. 143(3) plus the income allegedly escaped under normal provision]. On such facts, it is the plea of the assessee that its case is covered by the judgment rendered in the case of Motto Tiles P. Ltd.[ 2016 (6) TMI 381 - GUJARAT HIGH COURT] . As in the case of India Gelatine and chemicals Ltd. [ 2015 (2) TMI 808 - GUJARAT HIGH COURT] observed that even if the entire amount which is proposed to be added by the AO is sustained, there would be no addition to the tax liability of the assessee and the petitioner would be still governed by the provisions of S. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led ROI on 23-09-2010 declaring total income at NI L. The return filed by the assessee was subjected to regular assessment dated 28- 03-2013 under s. 143(3) of the Act. The income was assessed at Rs. 8,71,08,200/- and book profit under s. 115JB at Rs. 31,04,38,156/-. Thereafter, notice under Section 148 was issued by the AO to the assessee on 31.03.2017, that is, after a period of four years from the end of the assessment year where the original assessment was earlier completed under Section 143(3) of the Act. The assessee filed return of income in response to such notice issued under Section 148 of the Act and declared total income under the normal provisions at ₹ Nil. The re- assessment was however completed making certain disallowances and adjustments under the normal provisions of the Act as well as book profit computed under Section 115B of the Act. The income under normal provisions were re-assessed at ₹ 13,67,21,152/- and the book profit under Section 115JB were re-assessed at ₹ 35,31,97,481/- for MAT purposes. 3.1 In this backdrop, the ld. counsel submitted that in the instant case where the re-assessment proceedings were initiated for A.Y. 2010-11 after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arred by limitation qua alleged book profit escapement. Consequently, re- assessment proceedings must fail on this account. 3.2.2 Coupled with this, the ld. counsel submitted that the other allegations in the reasons recorded relates to assessment under the normal provisions whereby escapement of Rs. 4.96 cr. approx. alleged has no bearing for determination of issue towards validity of re- assessment notice. The ld. counsel submitted that in view of the fact that tax on income determined under Special Provision of Section 115JB exceeds the taxes payable on computation of income as per normal provisions, the reasons recorded in relation to adjustments under normal provision has no bearing for the purposes of determination of jurisdiction and unless the tax as per normal provision exceeds the tax payable under 115JB of the Act, the alleged escapement of income under normal provision would not permit the revenue to usurp jurisdiction under s. 147 of the Act. A reference was made to the decision rendered by the Hon ble Gujarat High Court in the case of Motto Tiles Pvt. Ltd. vs. ACIT (2016) 368 ITR 280 (Guj) for such proposition of law. 3.2.3 It was pointed out in conclusion that even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the sweep of Explanation 2 below Section 147 of the Act which envisages escapement of income in the circumstances specified therein. The learned DR for the Revenue thus contended that the express provisions of statute require to be accorded primacy and no other interpretative process in deviation thereof is called for. 5. We have carefully considered the rival submissions. The jurisdictional controversy has been raised on behalf of the assessee whereby the Tribunal has been called upon to adjudicate as to whether re-opening under s. 147/148 of the Act is maintainable where MAT liability as per book profits computed under s. 115JB of the Act would not get disturbed on correct application of law and tax on such book profits also exceeds the total income determined as per normal provisions. 5.1 To adjudicate the appeal, few material facts requires to be taken into account. It is the case of the assessee that as per the original assessment, the tax liability under s. 115JB as per book profits exceeds the tax liability as per normal provisions. The case has been reopened to adjust the book profits as well as to assess escaped income under normal provisions. It is further case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain. The relevant operative para in later decision of Hon'ble Gujarat in Motto Tiles (P.) Ltd. (supra) is reproduced hereunder: 11. Insofar as the second contention raised on behalf of the petitioner is concerned, the controversy stands squarely concluded by the decision of this court in the case of India Gelatine and Chemicals Ltd. (supra) wherein, the court in a case where the assessee had declared a loss of Rs. 1.44 crores under the normal computation and the assessment was framed on book profit of Rs.2.89, had held that even if the expenditure of Rs.116.86 lakhs is disallowed, there would be no resultant change in the petitioner's tax liability s ince the petitioner had already paid much higher tax and had allowed the petition. It appears that the revenue has accepted the said decision and has not challenged the same before the higher forum. The learned counsel for the respondent has urged that the decision requires reconsideration. Having regard to the facts and circumstances of the case, as well as the fact that the revenue has accepted the said decision, the court does not find any reason to refer the matter for consideration to a Larger Bench. 12. In the light of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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