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2025 (1) TMI 879

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..... ANTA SHARMA For the Appellant Through: Mr. Gaurav Gupta, SSC, Mr. Shivendra Singh and Mr. Yojit Pareek, JSCs For the Respondent Through: Mr. Shashi M Kapila, Mr. Pravesh Sharma and Mr. Sushil Kumar, Advocates JUDGMENT SWARANA KANTA SHARMA, J. 1. The Revenue has preferred the present appeal under Section 260A of the Income Tax Act, 1961 [hereafter the Act ] impugning an order dated 14.06.2019 [hereafter the impugned order ] passed by the learned Income Tax Appellate Tribunal [hereafter the learned ITAT ], in ITA No. 2784/Del/2013, in respect of the assessment year (AY) 2008-09. FACTUAL BACKGROUND 2. The respondent M/s Tata Power Delhi Distribution Limited [hereafter the assessee ] is a joint venture between Tata Power Company Limited and the .....

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..... added to the said amount. The relevant findings of the AO are as under: 7. With these remarks, the total income of the assessee company is computed as follows: TOTAL INCOME DECLARED IN COMPUTATION Rs. 5,45,53,690 Add: A. Addition on account of derecognizing of revenue (as per para 3) Rs. 53,38,00,000 B. Excess Tax Disallowed u/s 43B (as para 6) Rs. 10,92,88,102 C. Disallowance Interest on Computer Security Deposit (as per para 6) Rs. 8,04,00,000 D. Disallowance on UPS (as per para 7) Rs. 30,67,449 TOTAL INCOME Rs. 78,11,09,241 II. COMPUTATION OF BOOK PROFIT Book Profit declared u/s 115JB in the computation Filed along with the Return of Income Rs. 346,06,00,973 Addition on account of Provision for Doubtful debts As per Para 5 the pre-page .....

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..... rpose of section 115JB of the IT Act on account of excess depreciation on UPS amounting to Rs. 30,67,449/- and provision for doubtful debts amounting to Rs. 6,99,56,555/-. The Assessing Officer recomputed the book profits under section 115JB of the Act by making the above additions of Rs.7,30,24,004/- to the book profit shown by the assessee. 6.2 The Hon'ble Supreme Court in Apollo Tyres Ltd. 255 ITR 273 (SC) had laid down the principle that the Assessing Officer while computing income under section 115J had the power to examine whether the books of account were properly maintained In accordance with the Companies Act and further had limited power of making additions/deductions as provided for in the Explanation to the said section. In .....

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..... by way of a debit to the profit and loss account), if any such amount is credited to the profit and loss account: Provided that where this section is applicable to an assessee in any previous year, the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation or Explanation below the second proviso to section 115JA as the case may be; or In view of the above as per the provision explanation 1 of sec 115JB, while the AO is justified in making the ad .....

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..... icity Board 329 ITR 91 favour of the assessee and against the revenue. The Hon'ble High Court has held as under: * * * 8. Finding parity of facts with facts of the judgment of the Hon'ble Kerala High Court [supra], respectfully following the finding of the Hon'ble High Court, we hold the provisions of section 115JB of the Act are not applicable to the appellant company. The Assessing Officer is directed accordingly. additional ground raised by the assessee is allowed 7. Aggrieved by the decision of the learned ITAT, the Revenue has preferred the present appeal. QUESTION OF LAW 8. The present appeal was admitted on the following Question of Law, for this Court s consideration: Whether in the facts and circumstances of the case, a .....

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