D.C.I.T., CIRCLE-6(1), KOLKATA, KOLKATA vs. M/S ALL BANK FINANCE LTD., KOLKATA

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ITA 2144/KOL/2016Status: DisposedITAT Kolkata31 October 2018AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while a claim for revised income not made during assessment proceedings is beyond the scope of Section 154 rectification, there was a mistake in the AO's order as the Section 115JB income was not computed at all. Therefore, the AO was directed to compute the Section 115JB income based on available records.

What were the facts?

The assessee company filed its return of income, declaring a loss under normal provisions and income under Section 115JB. During scrutiny, it revised its normal income but not the Section 115JB income. Later, it filed a rectification application under Section 154 to revise its Section 115JB income, which was rejected by the AO.

What were the issues?

Whether a claim for revised book profit under Section 115JB can be considered through a rectification application under Section 154 when it was not raised during the original assessment proceedings. Whether the AO's failure to compute Section 115JB income constitutes a mistake apparent from the record.

Which sections of the Income-tax Act were involved?

Section 115JB,Section 154,Section 143(3)

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Income Tax Appellate Tribunal, KOLKATA BENCH ‘B’, KOLKATA

Before: Shri P.M. Jagtap, Vice- & Shri S.S. Viswanethra Ravi, JM]

Per P.M. Jagtap, Vice-President

1.

This appeal is preferred by the revenue against the order of Ld. CIT(Appeals) – 16, Kolkata dated 31.08.2016 whereby he directed the AO to consider the claim of the assessee for the revised book profit u/s 115JB of the Act made by way of rectification application u/s 154.

2.

The assessee in the present is a company which is engaged in the business of merchant banking. The return of income for the year under consideration was filed by it on 02.12.2009 declaring a loss of Rs. 5,55,92,485/- as per the normal provisions of the Act and income of Rs. 10,61,21,706/- u/s 115JB of the Act. The said return filed by the assessee was selected for the scrutiny assessment. During the course of scrutiny proceedings, the assessee filed a revised computation

Assessment Year: 2009-10 M/s. All Bank Finance Ltd. showing total income at Rs. 2,23,95,695/- under the normal provisions of the Act. The income declared u/s 115JB however was not revised by the assessee. In the assessment completed u/s 143(3) by an order dated 03.12.2011, the total income of the assessee was determined by the AO at Rs. 6,27,36,615/- under the normal provisions of the Act. Thereafter an application u/s 154 was filed by the assessee on 12.09.2013 claiming its income u/s 115JB of the Act at a revised figure of Rs. 8,82,48,219/-. Since the income u/s 115JB was not revised by the assessee during the course of assessment proceedings, the rectification application filed by the assessee u/s 154 was rejected by the AO vide his order dated 03.10.2013.

3.

Against the order passed by the AO rejecting the application of the assessee for rectification u/s 154, an appeal was filed by the assessee before the Ld. CIT(A) and by relying on the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. vs CIT 284 ITR 323 as well as the decision of Hon’ble Delhi High Court in the case of PCIT vs Western India Shipyard Ltd. 379 ITR 289, the Ld. CIT(A) accepted the fresh claim made by the assessee of the revised figure of book profit by way of rectification application u/s 154 and directed the A.O. to consider the same. Aggrieved by the order of the Ld. CIT(A), the revenue has preferred this appeal before the Tribunal.

4.

We have heard the arguments of both the sides and also perused the relevant material available on record. As rightly contended by the learned DR, the scope of rectification proceedings u/s 154 is limited to rectify the mistake apparent from record and Assessment Year: 2009-10 M/s. All Bank Finance Ltd.

therefore the claim of the assessee for the revised income u/s 115JB made by way of rectification application was beyond the scope of rectification permissible u/s 154. The said revised computation of income u/s 115JB was not filed by the assessee before the A.O. during the course of assessment proceedings, and since the same was not available on the assessment record, we find merit in the contention of the learned DR that there was no mistake in the order of the A.O. passed u/s 143(3) in not considering the same, calling for any rectification u/s 154. However, as pointed out by the learned counsel for the assessee, the income of the assessee u/s 115JB was not computed at all by the A.O. in the assessment completed u/s 143(3) vide an order dated 03.12.2011 and to that extent, there was a mistake in the said order which calls for rectification u/s 154. We accordingly modify the impugned order of the Ld. CIT(A) and direct the A.O. to compute the income of the assessee u/s 115JB on the basis of the information and material available on the assessment record.

5.

In the result, the appeal of the revenue is partly allowed. Order Pronounced in the Open Court on 31st October, 2018.

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