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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: SHRI PRAMOD KUMAR & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)-2, Ahmedabad, dated 28/11/2014 for the Assessment Year (AY) 2008-09, on the following Grounds: i. That the order passed by the ld. CIT(A) and AO is without jurisdiction and therefore the order passed by the ld.CIT(A) and AO is to be quashed and demand raised should be deleted. ii. That the ld. CIT(A) has erred in law and facts by confirming the demand of Rs.1,56,572/- raised by the ld. AO by passing order
ITA No.234/Ahd/2015 Mehta Tubes Ltd. v DCIT Asst.Year –2008-09 - 2 - under section 154 of the Act by the ld. AO and therefore the ld. AO should be directed to delete the same. 2. The relevant facts as culled out from the materials on record are as under:- In this case, assessee company filed its return of income for Asst. Year 2008-09 on 30.09.2010 declaring total income of Rs.70,98,930/-. The case was selected for scrutiny through issuing notice u/s.143(2) of the I.T. Act. The assessment order 143(3) was passed on 15.11.2010 and returned income was accepted.
2.2 Later on, scrutiny of record revealed that the assessee in its return of income book profit u/s.115JB is shown at Rs.2,07,96,060/- which exceeds Rs.1 crore. As per the provision of Income Tax, from the A.Y. 2008-09 on wards 10% surcharge is imposed to those assessee whose taxable income is above Rs.1 crore. In the instant case while passing the order u/s.143(3) of the I.T. Act 1961 the declared income of Rs.70,98,930/- was accepted as assessed income and tax calculation is worked out at Rs.21,93,569/- on normal assessed income. Since the tax calculation on book profit of Rs.2,07,96,060/- is comes to Rs.23,56,194/- which is higher than the normal provision of tax. As such the tax has worked out on incorrect income. The assessee is liable to pay tax on book profit u/s.115JB.
2.3 The mistake being apparent on record, therefore, the notice u/s.154 of the Income Tax Act was issued by the Ld.AO whereby the assessee
ITA No.234/Ahd/2015 Mehta Tubes Ltd. v DCIT Asst.Year –2008-09 - 3 - was informed about the proposed tax calculation on book profit and was requested to furnish submission.
2.4 In response to the notice issued u/s.154 of the I.T. Act, the assessee company has stated that the declared income under the normal tax provisions is not more than Rs.1 crore and therefore, the assessee is not liable to pay surcharge on the tax determined, which is less than the tax determined on MAT.
2.5 The reply of the assessee was considered carefully and found not acceptable.
2.6 Book Profit u/s.115JB was made of Rs.2,07,96,060/-.
Against the said order assessee preferred first statutory appeal before the ld. CIT(A) who partly allowed the appeal.
We have gone through the relevant record and impugned order. The company filed return for the year under consideration declaring total income of Rs.70,98,930/-. The case was selected for scrutiny u/s.143(2) of the I.T. Act. The assessment order u/s.143(2) was passed on 15.11.2010 and return of income was accepted. Thereafter, the ld. AO has passed an order u/s.154 stating that assessee is liable to pay tax on Book Profit u/s.115JB of the Act and not on assessed total income. Assessee also stated that proceeding u/s.147 of the Act was initiated for the said issue and same was dropped, before the issue of notice u/s.154 of
ITA No.234/Ahd/2015 Mehta Tubes Ltd. v DCIT Asst.Year –2008-09 - 4 - the Act. As it has been held by the Apex Court in the matter of T.S. Balaram, Income Tax Officer vs. Volkart Brothers & Ors. 82 ITR 0050: “Mistake apparent from the record in Section 154 must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivable be two opinions.” The mistake pointed out in the present case was certainly debatable and capable of tow views being taken. That taken it outside the ambit of mistake, even if any, which can be rectified under section 154.
In our considered view, mistake must be apparent from the record and obvious only then an order can be passed u/s.154 of the Income Tax Act. In view of the above discussion, we allow the appeal of the assessee and direct the AO to delete the demand of Rs.156,572/-.
In the result, appeal filed by the assessee is allowed. This Order pronounced in Open Court on 27/11/2017
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ITA No.234/Ahd/2015 Mehta Tubes Ltd. v DCIT Asst.Year –2008-09 - 5 -
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-2, Ahmedabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy 1. Date of dictation 13/11/2017 (dictation-pad 4 pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member …14/11/2017 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S……. 7. Date on which the file goes to the Bench Clerk………………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………