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2018 (12) TMI 821 - AT - Income TaxMAT computation - adjustment of book profit for working out MAT tax and the resultant profit on sale of assets - capital gains on sale of asset - Held that:- The capital gains on sale of asset resulted into Nil income. Therefore, even applying the case law in the case of Veekaylal Investment Co.(P) Ltd.[2001 (2) TMI 117 - BOMBAY HIGH COURT] the assessee is entitled for relief. In the instant case there was no profit in the ordinary course of business and the profit derived by the assessee was on account of sale of asset which was a capital profit. The assessee has not shifted the business profits to the balance sheet. The capital gains on sale of asset as per section 45 results in to loss but not the positive income. Therefore the facts of the assessee’s case are identical to the decision of Bombay high court in the case of Bhagwan Industries Ltd, [2017 (8) TMI 32 - BOMBAY HIGH COURT] and the said case is squarely applicable in the assessee’s case. The lower authorities committed an error in making adjustment to the book profit and the same deserves to be deleted. The next contention of the assessee is that SICA was exempt from the provisions of section 115JB of the Act. In the instant case, there is no dispute that the assessee company’s net worth was negative and the assessee satisfied the condition to hold the company as sick industrial company. Though the SICA was repealed w.e.f. 2003, the provision was not removed from the Income Tax Act. On the similar facts, the Coordinate Bench in B.V. REDDY TRANSPORTS PVT. LTD. VERSUS ASST. COMMISSIONER OF INCOME TAX [2018 (6) TMI 281 - ITAT HYDERABAD] decided the issue in favour of the assessee - there is no case for making adjustment s u/s 115JB of the act and the assessee is entitled for relief - Decided in favour of assessee
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