COMMISSIONER OF INCOME TAX vs. M/S.UNITED INDIA INSURANCE

1 In the High Court of Judicature at Madras Dated : 24.6.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.675 of 2018 The Commissioner of Income Tax, Larger Tax Payer Unit, Chennai. ...Appellant Vs M/s.United India Insurance Company Ltd., Chennai-34. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 15.3.2018 made in ITA No.1802/Mds/2011 on the file of the Income Tax Appellate Tribunal Chennai 'A' Bench for the assessment year 2002-03. For Appellant : Mr.M.Swaminathan, SSC For Respondent : No appearance Judgment was delivered by T.S.SIVAGNANAM,J This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act), is directed against the order dated 15.3.2018 passed by the Income Tax Appellate Tribunal, Chennai 'A' Bench http://www.judis.nic.in 2 (for brevity, the Tribunal) in ITA No.1802/Mds/2011 for the assessment year 2002-03. 2. The Revenue has filed this appeal by raising the following substantial questions of law : “i. Whether the Tribunal was right and justified in holding that the Assessing Officer cannot invoke the provision of Section 115JB although the order giving effect to the Tribunal's order resulted in loss under normal provision and resulted under MAT calculation under Section 115JB of the Act ? And ii. Whether the Tribunal erred in deleting the addition made to the books profit on account of diminution in the value of assets was in accordance with law that is as per Sub-Clause (i) of Explanation 1 to Section 115JB, which was introduced in the Statute vide Finance Act 2009 with retrospective effect from 01.4.2001 ?” 3. We have heard Mr.M.Swaminathan, learned Senior Standing Counsel appearing for the Revenue. Though the respondent was served and the name of the respondent is printed in the cause list, none appears for the respondent. 4. The short question involved in this case is as to whether the Assessing Officer, while giving effect to the order passed by the Tribunal, can travel beyond the order and recompute the book profits under Section 115JB of the Act. http://www.judis.nic.in 3 5. This aspect was considered by the Commissioner of Income Tax (Appeals), Large Tax Payer Unit, Chennai [for brevity, the CIT(A)] in his order dated 29.8.2011 and found that in the order passed by the Tribunal for the assessment year 2002-03, the relief was granted in respect of diminution in the value of assets other than actively treated equities and addition on account of deferred interest on debentures. It was further found that while giving effect to the order of the Tribunal, the Assessing Officer should have restricted the order only to the directions of the Tribunal regarding deletion of those two amounts and that in the absence of any specific direction on re- computation of tax under Section 115JB of the Act, the Assessing Officer was not within his power to make adjustment to the book profits. Ultimately, the appeal filed by the assessee was allowed by the CIT(A). 6. At the instance of the Revenue, the Tribunal re-examined the matter and concurred with the findings of the CIT(A). In our considered view, the findings rendered by both the CIT(A) as well as the Tribunal are perfectly right and fully justified. 7. For the said reasons, the above tax case appeal fails and is dismissed, as there is no substantial question of law arising for consideration in this appeal. 24.6.2019 RS http://www.judis.nic.in 4 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS Internet : Yes To The Income Tax Appellate Tribunal, Chennai 'A' Bench TCA.No.675 of 2018 24.6.2019 http://www.judis.nic.in