The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that the computation of Books Profit under section 115JB of the Income Tax Act is not warranted where Gross Taxable Income, Total Income and tax payable are “Nil.”
The Tribunal was examining a question regarding the applicability of Sec115JB of the Income Tax Act in cases where gross taxable income and total income are nil and as to the power of CIT(A) to deal with an issue not forming part of the assessment proceedings or assessment order.
While dealing with the power of first appellate authority to consider issues not forming part of the subject matter of the Assessment order, the Tribunal rightly found that it was indeed a settled position of law that no such power vests with the former. As per the facts underlying the appeal, the CIT(A) had computed book profits under Sec.115JB IT Act, which was not considered during the course of assessment. Commenting on the same, the Tribunal observed that Sec.115JB IT Act is a self contained code as per as per the CBDT Circular No. 13/2001 and being so CIT(A) is not empowered to enhance the assessment by computing book profits under it.
Further, the Tribunal observed that issue as regards applicability of Sec.115JB IT Act in case where gross taxable income and total income are nil was earlier decided in favour of the appellant by the Calcutta High Court, in his own case pertaining to different assessment year. The Tribunal, speaking through J.Sudhakar Reddy held that CIT(A) has erred in refusing to follow the said ration of the Jurisdictional High Court.
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