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Income Tax Appellate Tribunal, ‘D‘ BENCH
Before: SHRI AMIT SHUKLA & MS. PADMAVATHY S
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 23/12/2022, passed by NFAC, Delhi for the quantum of assessment passed u/s. 143(3) for the A.Y.2014-15.
2 M/s. Mane Finance Pvt. Ltd. 2. In the grounds of appeal
, assessee has raised the following grounds:-
1. That on facts and circumstances of the case and in law the ld. CIT(Appeals) has erred in not appreciating the facts and legal position involved in the case duly elaborated in statement of facts and appeal ground raised in appeal memo filed in form no.35 while dismissing the appeal of assessee company ex- partee in summary manner.
2. That on facts and circumstances of the case and also in law, the Id. A.O. and Id. CTT(Appeal) both have erred in not allowing the reduction of the provisions towards doubtful assets credited at Rs. 5,66,94,000/- in the profit & loss account while computing the book profit u/s 115JB without appreciating that the provision amount so credited represents the amount withdrawn out of the provisions made for doubtful assets in earlier year of AY 2013-14 at Rs. 5,96,94,000/- which was duly disallowed in computing the book profit u/s 115JB of that earlier assessment year of 2013-14. In view of the same action of lower authorities not allowing the reduction of provision credited at Rs. 5,66,94,000/- in profit & loss account for computing of book profit u/s 115JD of A.Y 2014-15 being opposed to law and also wrong on facts therefore same may be set aside and book profit declared in ITR filed at Rs.53,07,511/- be restored.
3. That the appellant craves the leave to amend, alter, substitute and or to raise new or additional grounds of appeal at the time of hearing
Ld. Counsel submitted that the ld. CIT (A) has decided the order exparte stating that assessee has not responded to these notices. Accordingly, without deciding the issue on merits he has dismissed the appeal in a very summary manner which reads as under:-
3 M/s. Mane Finance Pvt. Ltd. “In this case notices for hearing have been sent to the appellant on 31.12.2020, 01.02.2021, 07.12.2022 and 21.12.2022. The appellant has not responded to these notices. It is apparent that the appellant is not interested in pursuing the impugned appeal before me. On merits also there is nothing on record to support the issues connected to this appeal. Hence, in view of the above reasons this appeal is dismissed.”
The facts in brief qua the issue raised in the grounds of appeal are that, the ld. AO noted that in the profit and loss account assessee had deducted amount of Rs.5,66,94,000/- which has resulted into losses in the income tax return and the figure of book profit for MAT calculation becomes negative. Accordingly, the ld. AO made an adjustment in the following manner:- “As the net profit calculated as per the P&L a/c has to be taken as the profit for calculation of MAT u/s 115JB, the profit of Rs. 5,03,98,642/- as per the physical profit & loss a/c, filed during the assessment proceedings is taken as the profit for the purposes of calculation of MAT u/s 115JB. Penalty proceedings u/s. 271(1)(c) of the Act are separately initiated for furnishing inaccurate particulars of income.”
5. Before us, ld. Counsel submitted that the ld. AO has completely misunderstood and misinterpreted the facts because before the ld. AO it was clarified that the ‘other income’ shown at Rs.5,66,94,000/- in the profit and loss account there was provision for doubtful loans and advances credited under the category of doubtful assets in the earlier years which was disallowed in the computation in the previous F.Y.2012-13 is now returned back and therefore, shown as ‘non-operating 4 M/s. Mane Finance Pvt. Ltd. income’. Thus, there was no requirement for making any adjustment u/s.115JB, because it is not the case of provision for doubtful loans and advances which has been adjusted by the ld. AO while computing book profit.
The ld. DR submitted that since the ld. CIT (A) has passed an exparte order, the matter should be restored back to the file of the First Appellate Authority. On the other hand, ld. Counsel for the assessee submitted that let the matter should go back to the ld. AO as he has wrongly misinterpreted the provision for doubtful loans and advances.
After going through the assessment order, we find that the ld. AO has noted that assessee deducted Rs.5,66,94,000/- in the book profit which fact is incorrect, because apparently it appears that there was provision for doubtful loans and advances which was disallowed in the computation of income for the A.Y.2013-14 which now has been written back. This fact has been categorically brought to the attention of the AO vide letter dated 01/12/2016 alongwith copy of ledger accounts and the computation of income and return of income filed before us. Accordingly, this matter is restored back to the file of the ld. AO to examine this issue afresh after examining the records and decide the issue in accordance with law.