TMI Blog2007 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent-assessee filed Return of income on 28.11.1997 admitting income of Rs.27,13,390/-, and after adjusting a sum of Rs.22,57,277/- towards carry forward loss for the year 1995-96 and a sum of Rs.4,56,113/- towards carry forward loss for the year 1996-97, the income returned was "Nil". However, the assessee has computed the income under Section 115JA of the Income-tax Act ("Act" in short) on the book profit as Rs.64,74,643/- and computed the tax liability at Rs.8,35,229/-. The Return was processed under Section 143(1) of the Act and notice was also issued. Ultimately, the assessment was revised under Section 154 of the Act to tax the amount of Government Subsidy on generator, a portion of which was received by the assessee but has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of law is required, as it has not been done. But, unfortunately, the whole situation that came to be reversed due to the advent of the Hon'ble Supreme Court's decision in the case of Rajaram Maize Products reported in 251 ITR 427 (SC). After the decision, the whole exclusion on treatment of subsidy on power generator as a capital receipt and the claim of depreciation thereon undergoes a change, i.e. what should be treated as a capital receipt subject to claim of depreciation becomes revenue receipt subject to tax and other applications of the Act." 5. Accordingly, the order of the Assessing Officer was upheld and the appeal filed at the instance of the assessee was dismissed. 6. The issue was taken on appeal to Income-tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those profit and loss account for the relevant previous year prepared in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 could be taken into consideration for the applicability of the deemed income. So long as the assessee has not prepared profit and loss account and balance sheet as per the Companies Act, he cannot take a shelter under the ratio of the Apex Court in the appeal and the Assessing Officer is entitled to go into the very preparation of profit and loss account. 10. We have heard Mr.N.Muralikumaran, learned Senior Standing Counsel appearing for the Revenue. The issue raised in this appeal is not res integra as it has been clearly covered by the decision of the Apex Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J." 11. From a perusal of the above, it can be inferred that once the profit and loss account prepared by the assessee is certified by the authorities under the Companies Act, as having been properly maintained in accordance with the Companies Act, the Assessing Officer has only the limited power of making increases and reductions as provided for in the Explanation to the said Section, and he does not have the jurisdiction to go behind the net profit shown in the profit and loss account exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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