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Whether the assessing officer was right in coming to the conclusion that the accounts of the assessee were not prepared in accordance with the Companies Act, 1956 ['1956 Act', for brevity] and whether the additions made were proper?

Shanti Prime Publication Pvt. Ltd.

Section 115JB of the Income Tax Act, 1961- MAT - Additions made under the normal provisions of the Act, as well as under section 115 JB may be deleted and the rate of tax remains the same in all these years under section 115 JB.

Facts: Assessee admitted book profit under section 115JB . The return of income was processed under Section 143(1) and subsequently, the case was selected for scrutiny and a notice under section 143(2) was issued on 24-8-2010. A reference to the Transfer Pricing Officer was made under section 92(C)(A) for determining the ALP in respect of the assessee's transaction on its AE. Further, AO treated the interest income as income from other sources thereby denying the deduction under section 80 IA. AO computed the book profit under section 115 JB at Rs. 2,23,21,63,807/- under the caption 'Delayed Revenue Recognition'. Aggrieved by such order, assessee filed an appeal before CIT[A], who by an order partly allowed the appeal and rejected the grounds except the ground challenging the deletion of addition towards reimbursement to specified taxes and a direction was issued to the assessing officer to follow the decision of the Tribunal in the assessee's own case for AY-2004-2005 dated 2-3-2009.

Held, that this Court finds that assessee has raised a specific ground before Tribunal stating that the additions were made under the normal provisions of the Act as well as under section 115 JB, which the assessee prayed for deletion and submitted that since it has received and admitted, the impugned receipts for the subsequent year, the additions made under the normal provisions of the Act, as well as under section 115 JB may be deleted and the rate of tax remains the same in all these years under section 115 JB. In fact, the ground raised by the assessee was to delete the impugned additions on the ground that the receipts have been subjected to the tax in the subsequent year whatever the assessee had received from TANGEDCO. The Tribunal did not agree with the assessee and sustained the addition, if such is the factual position, the natural consequences that is to flow is to issue a direction to the assessing officer to take appropriate action in so far as the assessments from the year 2010-2011 to 2014-2015, during which the assessee has been taxed on the said receipts. If such a consequential direction is not issued, then, the assessee would be subjected to double taxation which is unauthorised in Law. Thus, we find that this issue can clearly be brought within the scope of Sub-Section (4) of 260 A and the Court would be justified in issuing appropriate direction to the assessing officer to reopen the assessments from the year 2010-2011 to 2014 -2015 on this issue alone and examine whether the assessee has paid taxes on these receipts, which addition have been sustained in the impugned assessment year 2009-2010 and after affording an opportunity to the assessee redo the assessment only on this aspect. In the result, the appeals are dismissed as no substantial question of law arises for consideration. - PPN POWER GENERATING COMPANY (P.) LTD. V/s CIT - [2020] 29 ITCD Online 012 (MAD)