9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (8) TMI 1112 - AT - Income TaxMAT Provisions of Section 115JB - Applicable on banks or not? - CIT(A) rejected the claim that the provisions of section 115JB is not applicable to the assessee bank as the same is not a company under the Companies Act 1956 as held in MAHARASHTRA STATE ELECTRICITY BOARD. VERSUS JOINT COMMISSIONER OF INCOME TAX. 2001 (8) TMI 310 - ITAT MUMBAI - HELD THAT - We find that recently the Mumbai Bench of the Tribunal in the case of KRUNG THAI BANK PCL VERSUS JOINT DIRECTOR OF INCOME TAX - INTERNATIONAL TAXATION MUMBAI 2010 (9) TMI 18 - ITAT MUMBAI held that the starting point of computation of MAT under sec. 115JB is the result shown by such a P L a/c. In the case of banking companies however the provisions of Sch. VI are not applicable in view of exemption set out under proviso to s. 211(2) of the Companies Act. The final accounts of the banking companies are required to be prepared in accordance with the provisions of the Banking Regulation Act. The provisions of s. 115JB cannot thus be applied to the case of a banking company. Further in the cases of RE. PRAXAIR PACIFIC LIMITED 2010 (7) TMI 51 - AUTHORITY FOR ADVANCE RULINGS and RE. THE TIMKEN COMPANY 2010 (7) TMI 50 - AUTHORITY FOR ADVANCE RULINGS it was held that MAT provisions are applicable to a foreign company that does not have a physical presence in India as such companies are not required to prepare its accounts as per Companies Act. Therefore respectfully following the above cited decisions of the Tribunal we set aside the orders of the lower authorities and allow the appeal of the assessee on the ground that the bank is not required to prepare its profit and loss account in accordance with the provisions of Part II and Part III of Schedule VI to the Companies Act and therefore the provisions of MAT in section 115JB is not applicable to the assessee - Decision in favour of Assessee.
Issues:
1. Applicability of section 115JB of the Income-tax Act, 1961 to a bank not classified as a company under the Companies Act, 1956. Analysis: The appeal was filed against an order of the Commissioner of Income Tax (Appeals)-III, Chennai for the assessment year 2000-2001. The main contention was regarding the applicability of section 115JB of the Income-tax Act, 1961 to the bank, which argued that it was not a company under the Companies Act, 1956. The Assessing Officer relied on provisions of the Companies Act and a decision of the Madras High Court to support the applicability of section 115JB to the bank. On appeal, the CIT(A) rejected the bank's claim, stating that every assessee being a company is required to prepare its profit and loss account in accordance with the provisions of the Companies Act, 1956. The CIT(A) differentiated the present case from a previous case involving an Electricity Board, emphasizing that the bank, in this instance, falls under different circumstances. The CIT(A) dismissed the bank's argument that section 115JB should not apply to it. During the proceedings, the bank reiterated its submissions, while the Departmental Representative supported the CIT(A)'s order. The Tribunal considered the bank's argument and referred to a Mumbai Tribunal decision and rulings by the authority for advance ruling in similar cases involving foreign companies without a physical presence in India. The Tribunal concluded that the bank, not required to prepare its accounts as per the Companies Act, is exempt from the provisions of section 115JB. Therefore, the Tribunal set aside the lower authorities' orders and partially allowed the bank's appeal, ruling that the bank is not subject to the provisions of Minimum Alternate Tax (MAT) under section 115JB. In conclusion, the Tribunal found in favor of the bank, holding that the bank, not required to prepare its profit and loss account in accordance with the Companies Act, is exempt from the provisions of section 115JB. The appeal was partially allowed in favor of the bank.
|
