M/S.GLOBAL AUTOMATION INDIA PVT. LTD.,BANGALORE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, BANGALORE

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ITA 1574/BANG/2016Status: DisposedITAT Bangalore04 April 2018AY 2009-20105 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CPC and CIT(A) failed to consider the deferred tax while calculating book profits. The Tribunal directed the CPC to recalculate book profits after considering the deferred tax.

What were the facts?

The assessee declared book profits of Rs. 46,78,727/- after adding deferred tax of Rs. 23,19,110/-. The CPC processed the return and calculated book profits at Rs. 72,07,979/-, excluding the deferred tax.

What were the issues?

Whether deferred tax should be considered while calculating book profits under Section 115JB. Whether the CPC correctly calculated book profits.

Which sections of the Income-tax Act were involved?

Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENGALURU BENCH B, BENGALURU

Before: SHRI. JASON P. BOAZ

For Appellant: Shri. G. N. Bhat, Advocate

v. Asst. Commissioner of Income-tax, Range -3(1)(2), Bengaluru .. Respondent Assessee by : Shri. G. N. Bhat, Advocate Revenue by : Smt. Padmameenakshi, JCIT Heard on : 28.03.2018 Pronounced on : 04.04.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER :

The present appeal is filed by the assessee against the order of the CIT (A)-3, dt.06.07.2016, for the assessment year 2009-10, on the following grounds :

ITA.1574/Bang/2016 Page - 2

2.

Brief facts are, the assessee e-filed the return of income for the AY 2009-10 declaring income of Rs.51,120/- under the normal provisions of the Income-tax Act, 1961. However, since the book profits of the assessee was more, income was calculated by the assessee as per section 115JB of the Act, at Rs.46,78,727/-. In the said book profit, the assessee has added the deferred tax at Rs.23,19,110/- prior to calculating the net profit as per the profit ITA.1574/Bang/2016 Page - 3 and loss account, before taxes. The computation of MAT payable u/s.115JB, item vi in Schedule MAT clearly shows the book profit u/s.115JB as Rs.46,78,727/-.

3.

The CPC had processed the return of income of the assessee .

However, under the book profit, the CPC worked out the book profit at Rs.72,07,979/- as against Rs.46,78,727/- as returned by the assessee. Feeling aggrieved the assessee filed rectification application with the CPC. However, CPC was not impressed with the submission made by the assessee. Accordingly the assessee preferred appeal against the rectification order dt.03.05.2011 before the CIT (A).

4.

The CIT (A) has rejected the objection of the assessee.

Thereafter assessee filled rectification application before CIT, however there also assessee was unsuccessful in getting the relief.

Feeling aggrieved the assessee is in appeal before us against the order of the CPC / CIT (A).

5.

Before us the Ld. AR has drawn our attention to page 62 of the paper book which is a part of the return of income wherein the calculation of book-profit is given, which is as under :

ITA.1574/Bang/2016 Page - 4

6.

The Ld. DR had relied upon the order of lower authority.

7.

We have heard the Ld. DR and gone through the written submissions filed by the assessee / AR. From a perusal of calculations mentioned in para 5 (supra) , it is clear that the assessee has calculated the book profit after taking into account the deferred tax of Rs.23,19,110/-. However the CPC which is there to facilitate ITA.1574/Bang/2016 Page - 5 and ease the tax payers in a clandestine and mechanical manner, had calculated the book profit at Rs.72,07,979/- prior to calculating the book profit. The CPC/ CIT(A) are duty bound to consider the deferred tax of Rs.23,19,110/-, while calculating the Book Profit, however needful was not done despite several attempts by the assessee. Hence the appeal of the assessee is required to be allowed.

8.

In view of the above, the CPC is directed to give effect to deferred tax, etc as done by the assessee and thereafter calculate the book profit.

9.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 4th day of April, 2018.

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