By Ajay R. Singh
Advocate
It
started in January, 1971 as “High Court News”. Dinesh Vyas, Advocate, started
it and it contained unreported decisions of Bombay High Court only. Between
January, 1976 and April, 1984, it was contributed by V H Patil, Advocate as “In
the Courts”. The baton was passed to Keshav B Bhujle in May, 1984 and he
carries it even today – and that’s 35 years of month on month contribution.
Ajay Singh joined in 2016-17 by penning Part B – Unreported Decisions.
16.
The Pr. CIT-1 vs. Family Investment Pvt. Ltd [ Income tax Appeal no:
1669 of 2016 Dated: 28th January, 2019 (Bombay High
Court)].
[Family Investment Pvt. Ltd vs. The Pr.
CIT-9; dated 02/12/2015 ; ITA. No 1945/Mum/2015, AY:2010-11; Bench
F Mum. ITAT]
Section 263 : Commissioner- Revision – Book
profit – only power vested upon the Revenue authorities is the power of
examining whether the books of accounts are certified by the authorities under
the Companies Act – Revision was not valid. [Section 115JB]
The assessee-company is engaged in the
business of dealing in shares and securities under the Portfolio Management
Scheme. While framing the assessment order u/s. 143(3) of the Act, the A.O
observed that 15% of Book Profit is less than the tax payable on the income assessed
under the normal provision of the Act, provisions of section 115JB of the Act
will not apply. Hence, for the purpose of taxation, total income shall be taken
as per the normal provisions of the Act. This order did not find favour with
the Principal CIT who vide notice u/s. 263 of the Act dated 22nd
September, 2014 sought to set aside the assessment order holding it to be
erroneous and prejudicial to the interest of the Revenue.
Being aggrieved
with the Pr.CIT order, the assessee filed an appeal to the Tribunal. The
Tribunal held that it can be seen that the only power vested upon the Revenue
authorities is the power of examining whether the books of accounts are
certified by the authorities under the Companies Act. It is not the case of the
Pr. CIT that the books of account have not been properly certified by the
authorities under the Companies Act, therefore the observations of the Pr. CIT
is not acceptable. The second contention of the Principal CIT is that the AO
has not examined this issue during the course of the assessment proceedings.
The Court observed that vide letter dated 7th
December, 2012, the assessee has furnished (a) ledger account of donation u/s.
80G alongwith donation receipts (b) copy of acknowledgement of return of income
and balance sheet and profit and loss account of Shantilal Shanghvi Foundation
alongwith all its schedule. Thus, it can be seen that in response to a specific
query, the assessee has filed all the related details alongwith supporting
evidences. Therefore, it cannot be said that the AO has not examined this issue
during the course of assessment proceedings. The AO has thoroughly examined the
claim, therefore ITAT set aside the order of the Principal CIT.
Being aggrieved with the ITAT order,
the Revenue filed an appeal to the High Court. The Court observed that on
perusal of the documents on record with the assistance of the learned counsel
for the parties would show that the Tribunal proceeded to allow the appeal
principally on two grounds.
Apart from these observations of the
Tribunal, independently the court observed that during the year under
consideration the assessee had committed to a total donation of Rs.12.75 crore,
out of which Rs.10.25 crore was actually donated during the period relevant to
the assessment year in question. Out of the remaining Rs. 2.50 crore, Rs. 2
crore was donated in the next year, but even before the date of closing of the
account of the present year and remaining Rs.50 lakh was donated shortly after
that. In view of such facts, we do not see any reasons to interfere.
The court also took the note of the
fact that the decision of the Supreme Court in case of Apollo Tyres is referred
to larger bench. In the result, appeal is dismissed.
