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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI JOGINDER SINGH, JM & SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R
Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2011-12 contest the order of Ld. Commissioner of Income-Tax (Appeals)-2 [CIT(A)], Mumbai, Appeal No.CIT(A)-2/IT-409/2013-14 dated 08/11/2016 by raising the following sole ground of appeal:- 1. The learned Commissioner of appeals erred in confirming the computation of ‘book profits’ made by the assessing officer under section 115JB of the Income Tax Act, 1961 wherein the added expenditure on ‘repairs and maintenance’ Rs.224,898/- disallowed under normal provisions without J.B. Boda & Co. Pvt.Ltd Assessment Year-2011-12 appreciating that explanation 1 to section 115JB provided specific additions/ deletions to be made to arrive at book profits which did not include disallowances under normal income tax provisions.
As evident from ground of appeal
, the sole subject matter of this appeal is adjustment of book profits u/s 115JB. The Assessment for impugned AY was framed by Ld. Deputy Commissioner of Income Tax-1(2) u/s 143(3) of the Income Tax Act, 1961 on 27/12/2013 wherein the income of the assessee has been determined at Rs.133.23 Lacs under normal provisions after certain additions / disallowances as against returned income of Rs.130.34 Lacs e-filed by the assessee on 25/11/2011. The ‘book profits’ for the purpose of computing Minimum Alternative Tax [MAT] u/s 115JB has been computed at Rs.224.51 Lacs as against Rs.221.63 Lacs computed by the assessee. During impugned AY, the assessee being resident corporate assessee was engaged as re- insurance broker.
2. During assessment proceedings, an amount of Rs.2,24,898/- debited by the assessee under the head repairs and maintenance of building, was disallowed while computing Business income since the same was incurred to earn the rental income which was separately assessed under the head Income from House property. The aforesaid addition was made while arriving at the normal income as well as while computing book profits u/s 115JB. Since tax liability u/s 115JB was higher, the assessee was liable to pay tax as per MAT provisions u/s 115JB.
3. The assessee, being aggrieved by aforesaid adjustment u/s 115JB, agitated the same without any success before Ld. CIT(A) vide impugned J.B. Boda & Co. Pvt.Ltd Assessment Year-2011-12 order dated 08/11/2016 wherein the stand of Ld. AO, in this regard, got confirmed. Aggrieved, the assessee is in further appeal before us.
The Ld. Authorized Representative for assessee [AR], Ms. Indra Anand, placed reliance on the decision of Hon’ble Apex Court rendered in Apollo Tyres Ltd. Vs CIT [122 Taxman 562] to submit that Ld. AO had no jurisdiction to go beyond net profit shown in profit and loss account except to the extent provided in Section 115JB. Per Contra, Ld. Senior DR placed reliance on the stand of Ld. CIT(A).
We have carefully heard the rival contentions and perused relevant material on record including cited judicial pronouncement and statutory provisions as contained in Section 115 JB of the Income Tax Act, 1961. It is undisputed fact that the assessee is a corporate entity and has drawn its accounts in accordance with the provisions of the Companies Act. Another undisputed fact is that it has debited aforesaid expenditure in the Profit and Loss account and the adjustment of such a nature, while arriving at book profits, is not envisaged by Explanation 1 to Section 115JB, which as per settled legal position, is a separate and complete code in itself. Upon due consideration, we find that the facts of the present case are squarely covered by the cited judgment of Hon’ble Apex Court rendered in the context of erstwhile Section 115J wherein the Hon’ble High Court has held as under:- “Therefore, we are of the opinion that the Assessing Officer while computing the income under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increase and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J.”