Case Law Details
M/s Safeflex International Ltd. Vs ITO (ITAT Jaipur)
Conclusion: While passing the assessment order u/s 143(3), AO had forgot to invoke the provisions of section 115JB, thus, the matter clearly fell within purview of section 154 and the same could be rectified as mistake apparent from record. AO was justified in bringing book profit u/s 115JB determined to tax inspite of assessee-company eligible for section 10AA benefit as on combined reading of provisions of sub-section (5) and (6) of section 115JB, it was clear that the MAT provisions had been specifically made applicable to assessee company in respect of its income from business carried on in its SEZ Unit for assessment year 2012-13 and onwards.
Held: Assessee had claimed exemption u/s 10AA in respect of its unit situated at M.P which was engaged manufacturing and export of Polyethylene & Polypropylene Bags generally used for transportation of goods. The assessment u/s 143(3) was completed by AO wherein deduction u/s 10AA had been allowed to assessee. Subsequently, notice u/s 154 was issued to assessee stating that on perusal of the assessment records, it revealed that the assessee was liable to pay tax u/s 115JB on book profit which was inadvertently not charged at the time of assessment u/s 143(3). Accordingly, order u/s 143(3) was rectified u/s 154 and book profit u/s 115JB determined was brought to tax, the same being higher than the income assessed under the normal provisions of the Act. Assessee contended that the rectification order being illegal, beyond scope and without any basis and MAT provisions contained in Section 115JB were not applicable to assessee company which was eligible for Section 10AA benefit. It was held In it was not in dispute that assessee carried on its business in an SEZ Unit and its income would therefore be subject to the provisions of Section 115JB. On bare reading of provisions of sub-section (6) to section 115JB, it was crystal clear that provisions of section 115JB would apply to assessee company for the assessment year beginning assessment year 2012-13 onwards. Therefore, while passing the assessment order u/s 143(3), where AO had forgot to invoke the provisions of section 115JB, the matter clearly fell within purview of section 154 and the same could be rectified as mistake apparent from record. On combined reading of provisions of sub-section (5) and (6) of section 115JB, no adjustment could be made to book profits as the MAT provisions had been specifically made applicable to assessee company in respect of its income from business carried on in its SEZ Unit for assessment year 2012-13 and onwards. Therefore, AO was justified in the assessment of income.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of Id. CIT(A)-2, Jaipur dated 26.03.2018 for Assessment Year 2012-13 wherein the assessee has taken the following grounds of appeal:
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