ANTONY LARA ENVIRO SOLUTIONS PRIVATE LIMITED ,MUMBAI vs. PCIT- 1 , THANE

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
27.03.2025 passed by the Ld. Principal Commissioner of Income- tax – 1, Thane [in short ‘the Ld. PCIT’] for assessment year 2020-21, raising grounds as reproduced below:
A] Grounds
1. In the facts of the case and in Law, the learned PCIT erred in invoking Section 263 to the case of the Appellant only by way of change of opi the A.O. and dated 03-03-2
2. In the facts or order u/s erroneous on 
In the erred becaus taken b opinion

In the erred transit during
FY 20
subseq
1/5th transit year 2

In the erred submis proceed verifica to in s of Rs though
3. In the fact erred in pass details cited passing the o
[B] Relief Pra
The appellan because PCIT revision and m
2. Briefly stated, under section 143(3
completed on 09.09. Antony Lara En
ITA inion, without pointing out any error in th d also by disregarding the detailed su
2025 made to him from time to time.
s of the case and in Law, the Show Cause s 263 alleging errors and prejudice, many counts as follows.
facts of the case and in Law, the lear in invoking the provision of sec. 26
se he wants to take a view different from by the Assessing Officer and thereby cha n of the Assessing Officer by his opinion.
facts of the case and in Law, the lear in overlooking the fact that once the tion amount of Rs.41,40,28,675/- is s the initial assessment year 2018-19 r
017-18, the scrutiny of the same quent four years has no relevance as su additions in next 4 years originates tion amount of Rs.41,40,28,675/- in first
017-18,.
facts of the case and in Law, the lear in directing that he AO shall exa ssion of the Appellant made during th dings and make necessary inquir ation in regard to the transition amount a section 115JB(2C) and allowability of t s. 8,28,05,735/-in the relevant ye h the same is claimed as per law only ts of the case and in Law, the learned sing the order u/s 263 by disregarding e in the reply to show cause notice an rder not tenable in law.
ayed:
nt therefore prays to quash the order
T had no proper juri iction to invoke pro merely a change of opinion.
the material facts are that t
) of the Income-tax Act, 1961
.2022, wherein the Assessing O nviro Solutions Pvt. Ltd.
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A No. 3505/MUM/2025
he order of ubmissions e Notice &
itself is rned PCIT
63 merely m the one anging the rned PCIT issue of scrutinized relevant to issue in ubsequent from the t financial rned PCIT amine the he present ries and as referred the claim ear even y.
PCIT has exhaustive d thereby u/s 263
ovisions of the assessment
(“the Act”) was Officer accepted the returned income and ₹75,70,83,250/- provisions as declare
3. The learned PC assessment records.
facie view that, in Tax(MAT) computati included one-fifth of section 115JB(2C), a ₹41,40,28,675/-. Thi required upon conver
3.1 According to th computed the transit to capital reserve and Explanation to sectio capital reserve and “other equity” adjust no details or support been called for or proceedings. He, th
25.02.2025 proposin
3.2 In response, t amount of ₹41,40,2
Antony Lara En
ITA of ₹1,42,62,650/- under the no - under the Minimum Alterna d in the return filed on 01.02.20
CIT thereafter called for and On such examination, he for under the Schedule of Minim on forming part of the return, th f the “transition amount” conte amounting to ₹8,28,05,735/-, b is transition amount pertained rsion to Ind-AS with effect from he learned PCIT, the assessee h tion amount by including adjus d securities premium, whereas c on 115JB(2C) specifically manda securities premium from the ments. The learned PCIT furthe ting material relating to MAT co examined during the origin herefore, issued a show-caus g revision under section 263. the assessee contended that 8,675/- stood duly disclosed nviro Solutions Pvt. Ltd.
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A No. 3505/MUM/2025
ormal provisions ate Tax (“MAT”)
021. d examined the rmed the prima mum Alternative he assessee had emplated under eing one-fifth of to adjustments
01.04.2017. had erroneously stments relating clause (iii) of the ates exclusion of computation of er observed that omputation had nal assessment e notice dated the transition in the audited financial statements and that such amou reserve and securiti that, following the a the said amount ha each year, includin assessee’s plea wa scrutinised in the ini no further enquiry w annual one-fifth adj figure.
3.3 The learned PC that no inquiry wha
Officer on this aspec year under considera particularly clause deemed to be erroneo of the Revenue. He a the limited purpose o correctness of the tra
The relevant finding o
“6. The Asse relevant enq
Explanation 2
any relief wit made by the A Antony Lara En
ITA for F.Y. 2017-18, as explaine unt had been computed after ex es premium. The assessee fur ssessment order for A.Y. 2018- ad been consistently added to ng the impugned year. The as that the transition amou itial year of Ind-AS adoption and was warranted in the subsequen ustments merely emanated fro
CIT, however, was not persuade atsoever had been conducted by ct during the assessment proc ation. Invoking Explanation 2 t
(b)—he held that the assessm ous insofar as it was prejudicial accordingly set aside the asses of directing the Assessing Officer ansition amount and the resulta of the Ld. CIT(A) is reproduced a essment order is required to be passed uiries and verification by the Assess
2(b) makes it clear that any order pass thout inquiring into the claim which shoul
Assessing Officer shall be deemed to be nviro Solutions Pvt. Ltd.
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A No. 3505/MUM/2025
ed in Note 37B, xcluding capital rther submitted
-19, one-fifth of the book profit essence of the unt had been d, consequently, nt years, as the om the original ed. He observed y the Assessing ceedings for the to section 263—
ment order was l to the interests sment order for r to examine the ant adjustment.
as under:
d by making sing Officer.
sed allowing ld have been erroneous in so far as it is of the asses
Rs.41,40,28,6
year 2018-19
issue in subs
1/5th additio amount of Rs tenable as th without exam assessment such, the cas
Act.
7. In view of the assessm r.ws.144B fo prejudicial to dated 09/09/
for the limited
8. The AO sh during the pre verification in section 115J
8,28,05,735/
4. Before us, the record a Paper Book
74 thereof, he drew
Form No. 29B, wher adjustment required
115JB of the Act pu
Standards (Ind-AS).
notice issued under s contended that all computation, includi before the Assessing
Antony Lara En
ITA s prejudicial to the interests of the revenu ssee that once the issue of transition
675/- is scrutinized during the initial
9 relevant to FY 2017-18, the scrutiny sequent four years has no relevance as ons in next 4 years originates from th
.41,40,28,675/- in first financial year 20
he AO has allowed the claim of Rs. 8, mining it during the assessment proceed year 2020-21, presently under consid se falls under Explanation 2(b) to Section above discussion, I have come to the con ment order dated 09/09/2022 passed or the A.Y.2020-21 is erroneous in so the interest of the Revenue. The asses
/2022 for A.Y.2020-21 is accordingly par d purpose to examine the following issue(s hall examine the submission of the ass esent proceedings and make necessary i n regard to the transition amount as re
JB(2C) and allowability of the cla
-in the relevant year.”
learned counsel for the asse k comprising pages 1 to 120. Ad our attention to the audit repo rein the auditor has certified t to be made to the book profi ursuant to the adoption of Ind
The learned counsel further section 142(1) of the Act dated requisite particulars concer ing the transition amount, were Officer during the assessment p nviro Solutions Pvt. Ltd.
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A No. 3505/MUM/2025
ue. The claim n amount of assessment of the same s subsequent he transition
017-18, is not ,28,05,735/- dings for the deration. As n 263 of the nclusion that d u/s.143(3) far as it is ssment order rtly set aside s) :- sessee made inquiries and eferred to in aim of Rs.
essee placed on dverting to page ort furnished in the quantum of it under section dian Accounting referred to the 09.02.2022 and rning the MAT e duly furnished proceedings.

CIT has proceeded on the pr mitted to verify whether the tra urposes was computed after ex es premium, as mandated by c on 115JB(2C). It is on this perce iction under section 263 has b
Explanation 2(b).
and, the assessee has consiste mount was duly computed in a s, after excluding capital reserve his very computation was subje
8-19—the initial year of Ind-AS nt was determined and accepte ne-fifth apportionments for the s mechanical in nature and did on. The assessee further demon report, the Ind-AS transition wo or A.Y. 2018-19 were all avail the time of completing the ass erable merit in the submission unt under section 115JB(2C) on the date of first-time adop
-fifth of such amount is to be ad nviro Solutions Pvt. Ltd.
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remise that the ansition amount xcluding capital lause (iii) of the eived absence of been invoked by ntly maintained accordance with e and securities ected to detailed adoption. Once ed in that year, subsequent four not warrant a nstrated that the orkings, and the lable before the essment for the of the assessee.
is a one-time ption of Ind-AS.
dded to the book profit in each of th foundational figure h year—and, significan no statutory warran amount in subsequen arithmetical apportio
4.7 In the present placed before us, cle
₹41,40,28,675/- was does not dispute this Officer did not again amount in the year u such a view overloo stands examined a Assessing Officer redetermining it in assessee has cons mechanism and furn
4.8 The computatio income and reprodu addition of ₹8,28,0
framework already su
Schedule 9
Minimum alternative
Antony Lara En
ITA he four succeeding previous y has been computed and exami ntly, accepted by the Assessing O nt for a fresh determination of nt years. What remains in later onment, not a fresh adjudication case, the assessment order fo early indicates that the transi s scrutinised and accepted. Th s fact; his grievance is only tha n verify the composition of the under consideration. In our con oks the settled principle that w nd accepted in the foundati cannot be faulted for not every succeeding year, particu sistently followed the same ished all requisite particulars.
on of book profit, forming part ced below for clarity, shows th
05,735/- was embedded in t ubjected to audit under Form No e tax nviro Solutions Pvt. Ltd.
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A No. 3505/MUM/2025
years. Once the ined in the first
Officer—there is f the very same r years is merely n.
r A.Y. 2018-19, ition amount of he learned PCIT at the Assessing same transition sidered opinion, where a matter ional year, the reopening or ularly when the e computation of the return of hat the one-fifth the accounting o. 29B:

New profit before tax a Less: Provision for Tax
Net Profit after tax (A)
Additions
Provision for Current T
Transition Amount u/s Credits to other compr u/s 115JB(2A)(a)
Total additions (B)
Deletions
Deferred Tax credited t
Withdrawal from reserv
Total deletions (C)
Book Profit (A+B-C)
Mat on book profit
Mat with SC & Cess on Whether earning so Exchange in Intl. Fi
Centre?
Depreciation debited
29B only)
Policies, standards &
accounts laid before A in P&L a/c
4.9 The Assessing O audited financials, an absence of a furth available and the is accepted finding,
“erroneous” in the repeatedly held by “erroneous and preju understood in a man error and prejudice; i substitute its subjec
Officer when the latt one.
Antony Lara En
ITA as per P& L A/c x in P&L A/c

Tax

8,41,11,175
s 115JB(2C)

8,28,05,735
rehensive income
2,04,186

to P&L a/c

4,62,66,344
ve or provisions

41,70,726

n book profit olely in Foreign inancial Services
No to P&L a/c (For 20,63,909
methods used in AGM are followed
Yes

Officer had the complete MAT co nd the earlier assessment on re her inquiry, when all materia ssue itself was derivative of a cannot by itself render th sense contemplated under s the Hon’ble Supreme Cour udicial to the interests of the Re nner consistent with the twin it does not authorise the revisio tive degree of inquiry for that o ter’s view is a plausible and leg nviro Solutions Pvt. Ltd.
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29,78,03,548
3,78,44,831
25,99,58,717

16,71,21,096

5,04,37,070
37,66,42,743
6,96,78,907
8,03,81,587

omputation, the ecord. The mere al was already an earlier year’s he assessment ection 263. As rt, the phrase evenue” must be requirements of onal authority to of the Assessing gally sustainable

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

Antony Lara En
ITA ded to :

BY ORDER

(Assistant Re

ITAT, Mu nviro Solutions Pvt. Ltd.
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R, gistrar) umbai