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2018 (11) TMI 438 - AT - Income TaxMinimum alternate tax u/s 115JB - Applicability of MAT where normal tax payable is itself Nil - intentions of the legislature - Held that:- Section 115J was introduced as an equitable measure in order to levy tax on companies which made huge profits and declared substantial dividends but did not pay income-tax because of the various tax concessions and incentives availed of by them. It was thought that such companies had the ability to pay taxes and they ought to contribute to the exchequer. The interpretation of section 115JB which is similar to section 115J and which we have adopted, is in consonance with the object of the section namely, that all companies which make handsome profits must- pay tax irrespective of the fact that -they would not have paid tax on their profits if their profits had been computed under the normal provisions of the Act in view of present case has made substantial book profit which according to its balance sheet comes to ₹ 6,18,3 6,130/-. However, by virtue of the relief available u/s.801A, it has claimed the entire business profits of ₹ 11,97,79,339/- to be exempt from tax with the result that its total income became nil and no tax waspayable. This is exactly the situation contemplated by the section for which provision has been made to the effect that the company should pay tax on its book profit and thus contribute to the exchequer. Therefore, there can be no escape from the position that the assessee company is caught within the mischief of section 115JB, notwithstanding that the tax payable by it on its total income computed under the normal provisions of the Act is Rs. Nil. It would be anomalous to hold that where tax of Re.!!- is payable on the total income computed under the normal provisions of the Act, then section 115JB would be attracted, but it would not be attracted when the tax payable on the total income is Rs.Nil either because the total income is nil or is a negative figure. It is well settled that the section has to be interpreted in such a manner as to avoid absurdity and also in such a manner as to advance the cause and suppress the mischief
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