The Tax Publishers2020 TaxPub(DT) 2904 (Mum-Trib)

INCOME TAX ACT, 1961

Section 115JB

Where issue was already dealt with by High Court in several decisions and in those decisions High Court held that subsidy received income have to be taken into account for computation of book profit and Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. ((2008) 305 ITR 227 (SC) : 2008 Tax Pub(DT) 2300 (SC)) has expounded that non-consideration of jurisdictional High Court decision can render a decision of the Tribunal suffering from mistake apparent from record. Therefore, matter was remanded back to CIT(A) to consider this issue de novo after taking into account High Court decisions.

MAT - Book profit under section 115JB - Addition on account of subsidy received on the Technology Upgradation Fund (TUF) -

Present issue was related to the treatment of subsidy received under TUF for the purpose of computation of book profit under section 115JB. AO having noted that the aforesaid sum was duly credited in the profit and loss account of assessee, had included the same in the computation of book profit. CIT(A) by referring to ITAT order in assessee's own case had directed that the said sum should be excluded while computing the income under section 115JB. Held: Department submitted that this issue was already dealt with by High Court in several decisions and in those decisions High Court held that such income have to be taken into account for computation of book profit. Proposition that book profit was not to be tinkered with was duly supported by High Court decision in M/s. Bhagwan Industries Ltd. (ITA No. 436 of 2015 vide Order, dated 18-7-2017). Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd., (2008) 305 ITR 227 (SC) : 2008 Tax Pub(DT) 2300 (SC) has expounded that non-consideration of jurisdictional Hight Court decision can render a decision of the Tribunal suffering from mistake apparent from record. Therefore, issue needs to be remitted back to CIT(A) to consider this issue de novo after taking into account High Court decisions.

Followed:M/s. Bhagwan Industries Ltd. (ITA No. 436 of 2015 vide Order, dated 18-7-2017), Akshay Textiles Trading And Agencies (P) Ltd. ((2008) 304 ITR 401 (Bom) : 2008 TaxPub(DT) 1145 (Bom-HC)) Adbhut Trading Co. (P) Ltd. ((2011) 338 ITR 94 (Bom) : 2011 TaxPub(DT) 1987 (Bom-HC) ACIT v. Saurashtra Kutch Stock Exchange Ltd., (2008) 305 ITR 227 (SC) : 2008 TaxPub(DT) 2300 (SC) Alok Industries Ltd. v. Dy. CIT [ITA No.7243/Mum./2017, dt. 26-7-2019] Alok Industries Ltd., Mumbai v. DCIT cent. Cir. 6 (2) [ITA 1017/MUM/2017, dt. 21-5-2018]Distinguished:CIT v. Veekaylal Investment Co. (P) Ltd., (2001) 249 ITR 597 (Bom.) : 2001 TaxPub(DT) 1104 (Bom-HC)

REFERRED :

FAVOUR : Matter remanded

A.Y. :

INCOME TAX ACT, 1961

Section 14A

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