ACIT 2 2 1, MUMBAI vs. STATE BANK OF INDIA, MUMBAI

Briefly stating, learned assessing officer, under rectification order dated 31.03.2018 passed u/s. 154 r/w 251 of the Act, made the computation of assessee’s income in accordance with the provisions of section 115JB of the Act. Learned CIT(A), in first appeal, has held that the provisions of section 115JB of the Act are not applicable to the assessee banking company as the same is governed by Banking Regulations Act, 1949, prior to 01.04.2012. Aggrieved, revenue is under appeal before this Tribunal on the ground that the assessee banking company is not exempt from the MAT Provisions.

Purused records. Heard learned DR for the appellant revenue and learned representative for the respondent assessee.

At the very outset, learned representative for the assessee has submitted that the provisions u/s. 115JB of the Act cannot be made applicable to the assessee banking company. Learned AR has further submitted that the matter is covered by the order dated 23.12.2016 passed by this Tribunal in assessee’s own case in for A.Y. 2008-09 and three ors. The relevant paras 8 and 8.1 are reproduced as under: “8. We have heard the rival submissions, carefully considered the same along with the orders of the tax authorities below. We noted that the said issue is duly covered in favour of the assessee by the decision of ITAT Mumbai 'E' Bench in the case of SBI Commercial & International Bank Ltd. vs. I.T.O. in I.T.A.No.3479/Mum/2011 in which vide order dated 18/01/2013 this Tribunal held as under:

State Bank of India "16. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. The learned counsel for the assessee at the outset, has relied on the decision of Mumbai G-Bench of ITAT in the case of Krung Thai Bank PCL VS. Joint Director of Income-tax (ITA No.3390/Mum/2009 dated 30th September, 2010) wherein it was held that the provisions of section 115 JB could only come into play when the assessee was required to prepare its profit and loss account in accordance with the provisions of part II and III of Schedule VI to the Companies Act and starting point of computation of minimum alternate tax (MAT) u/s. 115JB is the result shown by such profit and loss account. It was held that in the case of baking companies, the provisions of Schedule VI to the companies Act, however, are not applicable in view of exemption set out under proviso to section 211(2) of the Companies Act and since the final accounts of the banking companies are required to be prepared in accordance with the provision of the Banking Regulation Act, the provisions of section 115JB cannot be applied to the case of a banking company. As the learned DR has not been able to cite any judicial pronouncement which is in favour of the Revenue on this issue, we respectfully follow the decision of coordinate bench of this Tribunal in the case of Bank PCL (supra) and hold that the provisions of section 115 JB not being applicable in the case of the assessee being a banking company, the question of computation of book profit under the said provisions or making any addition for this purpose does not arise at all. The addition made by the AO and confirmed by Id CIT(Appeals) on account of provision for doubtful debts while computing the book profit u/s 115JB, therefore, is deleted." 8.1 Respectfully following the aforesaid decision of this Tribunal, we hold that the provision of section 115JB cannot be made applicable to the case of the assessee. Thus, ground No. 2 stands allowed. ”

We are in respectful agreement with the findings arrived at by the co-ordinate bench of this Tribunal. We, accordingly hold that the provisions of section 115JB of the Act cannot be made applicable to the case of the assessee banking company during the year under consideration. Learned CIT(A) has rightly held as such. The computation made by the learned assessing officer u/s. 115JB of the Act is hereby deleted. The issue arising out of the ground raised

by the revenue is State Bank of India decided against the appellant revenue and in favour of the respondent assessee.