Assessee's claim of calculation of book profit as per Sec 115JB (of Income Tax Act, 1961) held correct.
Assessee's claim of calculation of book profit as per Sec 115JB (of Income Tax Act, 1961) held correct.
Assessee mfd. & exported camshafts required in automobile industry. Assessee in return claimed deduction u/s 10B (of Income Tax Act, 1961). AO held, disallowance do not form part of net profit & should have been considered for computing eligible profit entitled to deduction u/s 10B (of Income Tax Act, 1961). On appeal, CIT(A) allowed assessee's claim. On appeal ITAT held, Claim of assessee with special reference to calculation of book profits by applying proviso of section 115JB (of Income Tax Act, 1961) is correct.-500514
Facts in Brief:
1. Assessee was 100% Export Oriented Unit, engaged in the business of manufacturing of camshafts required in automobile industry.
2. Assessee furnished return of income claiming deduction under section 10B (of Income Tax Act, 1961).
3. Assessing Officer was of the view that the said disallowance does not form part of the net profit and the same should have been considered for computing eligible profit entitled to the deduction under section 10B (of Income Tax Act, 1961).
4. On appeal, CIT(A) allowed the claim of assessee vis-à-vis deduction under section 10B (of Income Tax Act, 1961) on the enhanced income, in the absence of any provision under section 10B (of Income Tax Act, 1961), wherein it has not been provided that the income enhanced after statutory disallowance under section 40(a)(ia) (of Income Tax Act, 1961) of the ITA No. 70/PN/2012 ITA No.72/PN/2012 Precision Camshafts Limited (earlier known as Precision Valvetrain P. Ltd.) Act cannot be excluded from the business profits of the eligible undertaking while computing deduction allowable under section 10B (of Income Tax Act, 1961).
On appeal ITAT held,
5. We find merit in the claim of assessee with special reference to the calculation of book profits by applying provisions of section 115JB (of Income Tax Act, 1961). The assessee has also filed a revised computation of eligible book profits under section 115JB (of Income Tax Act, 1961), which is also placed on record.
6. In case, the amount of unascertained liabilities of Rs.2.65 crores is added back to the net profit shown in the Profit & Loss Account and the balance expenditure and income relatable to the deduction claimed under section 10B (of Income Tax Act, 1961) is added / reduced, then it cannot be held that the assessee had not added back the ITA No. 70/PN/2012 ITA No.72/PN/2012 Precision Camshafts Limited (earlier known as Precision Valvetrain P. Ltd.) provision of Rs.2.65 crores.
7. However, in fairness, we are of the view that the matter needs to be looked at by the Assessing Officer in this regard. Accordingly, we direct the assessee to furnish the requisite calculation before the Assessing Officer, who in turn shall verify the same and compute the book profits under section 115JB (of Income Tax Act, 1961) in this regard , after affording reasonable opportunity of hearing to the assessee. The ground of appeal No.3 raised by the assessee is thus, allowed for statistical purposes.
8. In the result, the appeal of the assessee is allowed and the appeal of Revenue is dismissed.
Case Reference- Income Tax Appellate Tribunal - Pune Precision Volvetrain P.Ltd, ... vs Department Of Income Tax
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