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ITAT upheld AO's assessment in which assessee computed composite income u/r 8
ITAT upheld AO's assessment in which assessee computed composite income u/r 8
Assessee company was in the tea business. It filed a revised return of income, and assessment was completed u/s 143(3), after making certain additions. CIT(A) found AO's order to be erroneous and restored the matter to AO. On appeal, the ITAT held that AO had made no error in accepting the tax return in which composite income was computed by the assessee in accordance with Rule 8. It restored the AO's assessment order u/s 143(3).-501417
1. The assessee company was engaged in the business of growing, manufacturing and selling of tea. It declared total income of Rs.11,07,27,313/-. Thereafter a revised return was filed by the assessee declaring total income of Rs.13,17,48,375/-. In the assessment completed under section 143(3), the total income of the assessee was determined by the Assessing Officer at Rs.18,79,66,750/- after making certain additions.
2. CIT(A) found the AO's order to be erroneous and restored the matter to AO.
3. On appeal, the ITAT held as under:
"It is thus clear that the composite income was computed by the assessee in accordance with Rule 8 of the Income Tax Rules after duly deducting the corresponding receipts relating to the other expenditure such as agriculture, wealth tax, loss on trade investment written off, provision for diminution in value of investment, etc., which were not eligible to be part of composite income and there was no error in the order of the Assessing Officer accepting the same while completing the assessment under section 143(3) calling for revision under section 263 by the ld. CIT. We, therefore, set aside the impugned order passed by the ld. CIT under section 263 on this issue and restore that of the Assessing Officer passed under section 143(3).
