BEACH MINERAL COMPANY (P) LIMITED,CHENNAI vs. ACIT, CHENNAI

The brief facts of the case are that the assessee is a private limited company engaged in the business of manufacturing, processing and exporting of pulverized Garnet Abrasives Grit. The assessee has filed its return of income for the assessment year 2008-09 on 07.01.2009 claiming deduction u/s.10B of the Income Tax Act, 1961 (hereinafter the ‘Act’) and paid taxes on book profit u/s.115JB of the Act. The assessment for the impugned assessment year was completed u/s.143(3) of the Act on 29.12.2010 disallowing the deduction claim u/s.10B of the Act on the ground that there was a delay in filing the return of income and the appellant was not eligible for deduction u/s.10B of the Act. The assessee carried the matter in appeal before the first appellate authority. The ld.CIT(A)- 9 has allowed partial relief to the assessee in respect of deduction C.O No.27/Chny/2013 claimed u/s.10B of the Act by holding that filing of Income Tax return within the due date is directory and not mandatory for availing the deduction u/s.10B of the Act. Consequent to the order of the CIT(A), the AO passed order giving effect on 26.09.2012. Subsequently, the AO after passing the order giving effect to the order of the CIT(A)-9, issued notice u/s.154 of the Act for rectification of mistakes interalia re-computation of book profit and after considering relevant submissions of the assessee, passed order u/s.154 of the Act and revised the book profit to Rs.37,48,52,224/-. Mean time, the assessee as well as the Revenue filed further appeal before the Tribunal against the order of the ld.CIT(A). The Tribunal vide its order dated 07.11.2019 in & 2114/Chny/2012 and ITA No.1904, 2002 & 2003/Chny/2014 set aside the appeal filed by the assessee as well as Revenue to the AO with certain directions including re-computation of book profit u/s.115JB of the Act, after deciding on the issue of deduction u/s.10B of the Act. The assessee has also challenged 154 order passed by the AO before the CIT(A) but could not succeed. The ld.CIT(A) for the reasons recorded in his appellate order dated 28.03.2014 dismissed the appeal filed by the assessee. Aggrieved by the CIT(A) order, the assessee is in appeal before us.

The ld.DR on the other hand fairly agreed that the appeals filed by the assessee as well as the Revenue against the order passed by the AO denying deduction claimed u/s.10B of the Act has been set aside to the file of the AO to reconsider the issue and hence computation of book profit is consequential to the issue of deduction claimed u/s.10B of the Act and accordingly this appeal as C.O No.27/Chny/2013 well as cross objection filed by the assessee needs to go back to the file of the AO.

We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. We find that the appeals filed by the assessee as well as the Revenue challenging the findings of the ld.CIT(A) regarding deduction claimed u/s.10B of the Act has been set aside to the file of the AO by the Tribunal vide its order dated 07.11.2019, where the Tribunal has directed the AO to recompute the book profit u/s.115JB of the Act after deciding the issue of deduction u/s.10B of the Act. We further noted that in the present appeal as well as the cross objection filed by the assessee, the only issue challenged in the appeal is with regard to computation of book profit u/s.115JB of the Act. Since deduction claimed u/s.10B of the Act, would have a bearing on the recomputation of book profit u/s.115JB of the Act and the very same issue of deduction u/s.10B of the Act is restored to the file of the AO, the computation of book profit also needs to go back to the file of the AO. Therefore, we are of the considered view that the appeal filed by the assessee against the proceedings u/s.154 of the Act and cross objection filed by the assessee challenging computation of book profit u/s.115JB of the Act needs to C.O No.27/Chny/2013 go back to the file of the AO. Hence, we set aside the appeal as well as the cross objection filed by the assessee to the file of the AO and direct him to reconsider the issue after deciding the issue of deduction claimed u/s.10B of the Act in pursuant to directions of the Tribunal given in the order dated 07.11.2019.

In the result, the appeal as well as the cross objection filed by the assessee are treated as allowed for statistical purpose.