ORDER

Per Shri A.K. Garodia, Accountant Member

This appeal is filed by the assessee and the same is directed against the order of ld. CIT-LTU, Bangalore dated 04.01.2017 for Assessment Year 2012-13 u/s. 263 of IT Act.

2. The grounds raised by the assessee are as under.

“1. The Order of the Learned Commissioner is not justified in law and on facts and in circumstances of the case.

2. As regards jurisdiction of the Learned Commissioner to invoke revisionary proceeding under section 263:

2.1. The Learned Commissioner is not justified in invoking revisionary proceedings under section 263 when the essential conditions for invoking the said section did not exist.

2.2. The Learned Commissioner has erred in holding that the assessment order passed under section 143(3) is erroneous and prejudicial to the interest of the revenue without establishing the same.

3. As regards adding back provisions for bad debts amounting to Rs.50,22,576/- while computing book profits under Section 115JB:

3.1. The Learned Commissioner has erred in regarding the impugned sum as provision when the same was actually written off as held by the Apex Court and the jurisdictional High Court.

3.2. Without prejudice to the above, the Learned Commissioner has erred in directing the add back of the impugned sum when the issue is highly contentious and open to debate.

4. As regards adding back disallowance of Rs.89,98,661/- made under Section 14A while computing book profits under Section 115JB:

4.1. The Learned Commissioner is not justified in invoking Section 14A for the purpose of Clause (f) of Explanation 1 to Section 115JB i.e. "the amount or amounts of expenditure relatable to any income to which section 10... or Section 11 or Section 12 apply" when section 14A does not apply to computation of book profits under Section 115JB which is a complete code by itself.

4.2. The Learned Commissioner has failed to appreciate that while determining the expenditure to be added back as provided in clause (f) to Explanation 1, only direct expenditure if any should be considered and there is no warrant/ mandate for importing of provisions of section 14A whether by letter or by spirit.

4.3. Without prejudice to the above, the Learned Commissioner has erred in directing the add back of the impugned sum when the issue is highly contentious and two views are possible in the light of conflicting decisions available in the field.

For the above reasons and for such other reasons which may be allowed by the Honourable Members to be urged at the time of hearing, it is prayed that the aforesaid appeal be allowed.”

3. Brief relevant facts are that the assessee filed return of income for this Assessment Year on 28.09.2012 declaring an income of Rs. 101,12,19,490/- after claiming deduction u/s. 10A/10AA of IT Act. The assessee’s case was selected for scrutiny under CASS and notice u/s. 143(2) was issued by the AO to the assessee on 07.08.2013. Notice u/s. 142(1) was also issued calling for various information. As per para no. 4 of the written submissions filed by assessee before the Tribunal, this is stated that in the statement of computation of normal income, the assessee had added back Rs. 50,22,576/- towards provision for doubtful debts and Rs. 89,98,661/- towards disallowance u/s. 14A of IT Act. But in the computation of book profits, the assessee did not add back these two amounts. In Para 5 of the written submission, it has been submitted that subsequently, the AO passed the assessment order u/s. 143(3) on 24.03.2015 and in the assessment order, the AO accepted the computation made by the assessee subject to three additions being i) disallowance of depreciation of Rs. 50,97,324/- claimed on good will, ii) disallowance of Rs. 1,73,026/- in respect of deduction claimed by assessee u/s. 10AA and iii) disallowance of Rs. 1,50,000/- on account of club expenses. Being aggrieved, the assessee filed an appeal before CIT(A) and ld. CIT(A) partly allowed the appeal of the assessee vide its order in ITA No. 9