Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (3) TMI 811 - AT - Income TaxDisallowance of claim for reduction of profits earned during sick period while computing book profit u/s 115JA(2)(vii) - It is submitted that the objection of the CIT (A) on the words designedly omitted as stated by him are creation of his own imagination - According to CIT (A) there is no ambiguity because S.115JA never states that all the profits of all the years during the sickness period shall be adjusted against the profits of a future year for determination of book profits under section 115JA - The book profit of the assessee is to be computed with reference to each assessment year and the provisions of section 115JA(2)(vii) cannot be applied for assessment year 2000-01 after the assessee went out of the sickness - Interpreting the meaning of the section 115JA (2)(vii)/115JB (2) (vii) as supposed by the AR would perhaps, lead to a positions and results, the dimensions and implications of which are not to say the least, fully explored - Held that: The deduction cannot be claimed year after year as interpreted by the assessee even after assessee recovered from the sickness - Appeal is dismissed Regarding prior period expenditure - Held that: earlier expenses debited to the profit and loss account of the years under consideration, the deduction of such expenses either from the book profit or from normal computation of income cannot be allowed - Appeal is dismissed Regarding provision for doubtful debts - this issue is covered against the assessee by the judgement of Supreme Court in the case of CIT vs. HCL Comnet Systems and Services Ltd. (2008 -TMI - 30808 - SUPREME COURT) wherein it was held that any provision made towards ir-recoverability of a debt cannot be said to be a provision for liability Regarding interest u/s 234B and 234C while computing income u/s 115JA/JB - this issue is squarely covered by the recent judgement of Supreme Court in the case of JCIT vs. Rolta India Ltd. (2011 -TMI - 201466 - SUPREME COURT OF INDIA) wherein it was held that interest is chargeable u/s 234B and 234C on failure to pay advance tax in respect of tax payable u/s 115JA/JB Regarding treating the expenditure of Rs. 119.46 lakhs on plantations pertaining to earlier assessment year 2003-04 and debited it to the P and L A/c - During this assessment year assessee changed the accounting policy with regard to this expenditure because of which expenditure incurred in the previous year relevant to the assessment year 2003-04 considered as a revenue expenditure - if the assessee treated the plantation expenditure as a current asset in the earlier year and the same was valued at cost or market price whichever is lower and same method to be followed in the assessment year under consideration also. But there should be basis for such valuation of the asset - Appeal is allowed by way of remand to AO
|