Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 1029 - HC - Income TaxMAT - Computation of book profit - computing deemed income u/s. 115JA - HELD THAT:- In the present case, the auditors have not certified that the books of account were properly maintained in accordance with the provision of the Companies Act. The auditors in their certificate have indicated that the depreciation was not charged to the Profit & Loss A/c. and therefore, the certificate was subject to Note No.9 amongst others. Submissions advanced by Mr. Khaitan must prevail. The Assessing Officer does not have jurisdiction to go behind the net profit shown in the Profit & Loss A/c., except as provided in the statute, in those cases where the accounts have been properly maintained. When the Statute provides for computation of book profit of the assessee being a Company which has computed the total income under this Act in respect of any previous year, it has to be implied that the legislature intended to mean that the assessee, being a Company, has computed total income correctly as per the provisions of the Act. If the total income has not been correctly computed, then the bar created limiting the jurisdiction of the Assessing Officer would not be operative. For the aforesaid reasons, the findings of the learned Tribunal indicated above are reversed. Net profit computation for the purposes of section 115JA - On account of depreciation, the learned Tribunal opined that the Assessing Officer had no jurisdiction to tinker with the books of accounts certified by the auditors, but with regard to this item of expenditure, the learned Tribunal exhorted the Assessing Officer to tinker with the books of accounts. There was no question of allowing any adjustment as per Explanation to Section 115JA. The prior period expenditure amounting to a sum of ₹ 1,28,986/- was already shown in the profit and loss account as per accounting standards. The learned Tribunal purported to disallow the aforesaid expenditure on the basis of a mistaken belief that the assessee was seeking adjustment of the aforesaid sum in computing the book profit but missed the fact that the expenditure had already been taken into account in computing the net profit.
|