MANIAR INJECTOPLAST P.LTD,MUMBAI vs. ITO 9(2)(3), MUMBAI

The present appeal has been preferred by the assessee against the order dated 16.10.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11.

The facts in brief are that the said appeal was decided by the co-ordinate bench of the Tribunal vide order dated 25.10.2017. However, ground No.11 was inadvertently left out from being adjudicated. Thereafter, the assessee moved a miscellaneous petition 594/M/2018 wherein it was prayed before the Bench that order passed by the Tribunal has not 2 M/s. Maniar Injectoplast Pvt. Ltd. adjudicated the ground No.11 raised by the assessee and therefore the said order of the Tribunal is prima-facie contained an error to that extent. The co-ordinate bench of the Tribunal vide its decision dated 08.03.2019 in MA/594/2018 (supra) as arising out of ITA No.406/M/2015 A.Y. 2011-12 recalled its order to the extent of non adjudication of ground No.11. The ground No.11 reproduced as under: “11. Re-computation of book profit under section 115JB after including the income from sale of property unjustified -Rs.79,37,299/- The Ld. CIT(A) erred in confirming the action of Ld. A.O. in determining the book profit at Rs. 79,37,299/- under section 115JB of the Act after considering the capital gain on sale of property amounting to Rs. 1,43,04,691/- and immovable property of Rs.85,00,000/-. The Appellant prays that the addition made to the book profit under section 115JB of the Act is unjustified and the same may be deleted.”

The in brief are that the main issue in the appeal was with regard to taxability of gain on sale of land and building along with furniture whether taxable in the year under consideration or in the assessment year 2011-12. The co-ordinate bench of the Tribunal deleted the addition made by the AO under the normal provisions of the Act in respect of capital gain by holding that the sale of land and building has taken place in A.Y. 2011- 12 and not during the instant year. The bench further noted that the assessee has also offered to tax the capital gain on the said transfer and paid the due taxes accordingly which was accepted by the Department. Thus as a consequence, addition to the book profit under section 115JB should also have been deleted. However, the Tribunal while passing the order wrongly stated that the said ground was not pressed and dismissed as not pressed which has been accepted by the co-ordinate bench of the Tribunal in the miscellaneous application and order was recalled to that extent.

Now after hearing both the parties and perusal of the material on record, we observe that the addition on account of gain on land and building has been decided by the co-ordinate bench of the Tribunal to be not taxable in the current year and therefore the consequential effect has to be given while calculating the book profit under section 115JB of the Act. Accordingly, we hold that even for the computation of book profit under section 115JB of the Act the addition made by the AO needs to be deleted Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to delete the addition while computing book profit. Ground No.11 is allowed.

In the result, the ground no. 11 is allowed the order and the order dated 25.10.2017 of the coordinate bench stands modified to that extent.