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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-16, Mumbai [in short CIT(A)], in Appeal Nos. CIT(A)-16/ITO-9(3)(2)/IT-11618/2015-16 vide dated 24.12.2019. The Assessment was framed by the Dy.
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the addition on account of interest under section 234B, 234C and 234D of the Act while computing book profit under section 115JB of the Act. For this, Revenue has raised the following two grounds:-
“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in deleting the addition on account of interst under section 234B, 234C and 234D to the tune of ₹3,43,86,460/- for determination of book profit u/s. 115JB of the Act without appreciating of the I.T. Act without appreciating the clause (ii) to Explanation 2 of the Act read with clause (a) of the Explanation 1 of the Act, which clearly states „Income Tax‟ shall include any interest charged under this Act?
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has rightly held that the term “Income Tax paid / payable” does not includes interest thereon?”
I Income from House Property 4,20,000 (as per CoI) II Business Loss (As per CoI) (7,24,37,595) Add: Interest u/s 234/C/D (para 5.4) 3,43,86,460 Total Income (3,76,31,135) 4. The Assessing Officer also computed the total income i.e. MAT calculation under section 115JB of the Act and the relevant computation read as under:-
MAT Calculation u/s. 115JB of the Act Particulars Rs. Book Profit as per computation (7,05,33,557) Add: Interest u/s 234B/C/D (para 6) 3,43,86,460 Book Profit u/s 115JB (3,61,47,097) 5. According to Assessing Officer, since the book profit is negative figure, the provisions of MAT will not apply in this case and accordingly the income was assessed at a total loss of ₹3,76,31,135/-. Aggrieved, against the addition of interest under section 234B, 234C and 234D amounting to ₹3,48,86,460/- and carried forward of business loss to the extent of ₹3,61,47,097/-, assessee preferred the appeal before Commissioner of Income Tax “6.2.3 I had considered the contention raised by the Assessing Officer as well as by the appellant. As per the provision of section 115JB of the Income Tax Act, 1961 only specific amount can be added back/ deducted from the book profit. As per clause (a) to Explanation 1 of section 115JB of the Income Tax Act, 1961 the amount of income tax paid or payable and provision thereof, can only be added to the book profit of the appellant. From the foregoing paras it is clear that the interest paid under section 234B, 234C and 234D of the Income Tax, 1961 are not forming part of the Tax amount as per section 2(43) of the Income Tax Act, 1961.
6.2.4 In view of the above, the appellant had correctly not added the interest component to the book profit for determining adjustable book profit as per section 115Jb of the Income Tax Act, 1961 without adding the interest component. Hence, this ground of appeal is allowed.”
Aggrieved, now Revenue is in appeal before Tribunal.