By TIOL News Service

JAIPUR, APR 30, 2019: THE ISSUE IS - Whether share of profit from Joint Venture is to be excluded for the computation of book profit U/s 115JB. AFFIRMATIVE IS THE ANSWER FROM THE TRIBUNAL.

Facts of the case

The assessee company filed return for relevant AY. During assessment, the AO made addition on account of adjustment made in the book profit computed u/s 115JB of the Act in respect of share of the assessee in the income of joint venture. On appeal, CIT(A) deleted the addition made by the AO by following the decision of this Tribunal in assessee’s own case for the assessment year 2014-15.

On appeal, Tribunal held that,

++ the Tribunal vide order dated 23rd August, 2018, 2018-TIOL-1656-ITAT-JAIPUR for the assessment year 2014-15 has considered the issue and held as under ".. Thus, it was held that the amendment was brought to remove the hardship and bring the parity of the income being share in the association of persons or body of individuals, which is otherwise not liable to tax as per the provisions of Section 86 of the Act, the same shall have retrospective application. In absence of any contrary precedent brought to our notice and to maintain the rule of consistency, we follow the decision of Mumbai Benches of the Tribunal in the case of M/s Goldgerg Finance Pvt. Ltd. Vs ACIT. Accordingly, we do not find any error or illegality in the order of the CIT(A) qua this issue. Hence, this ground of revenue’s appeal stands dismissed.";

++ in principle, the issue is covered by the earlier decision of this Tribunal. However, the only point is to be considered is that whether the income of the joint venture assessed as AOP was exempt or not from the Income Tax and then the share in the income of the AOP has to be treated as per the provisions of section 67A of the Act. Accordingly, so far as the addition deleted by the CIT (A), is concerned no error was found or illegality in the impugned order of the CIT (A), however, the AO has to verify the fact whether the income or any part of the income of the joint venture can be assessed in the hands of the assessee in terms of section 67A of the Act. In the result, appeals of the revenue are dismissed.

(See 2019-TIOL-863-ITAT-JAIPUR)