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2005 (2) TMI 749 - ITAT MUMBAIMinimum alternate tax - liability to be taxed u/s 115JA - Sale of shares as part of ‘book profit’ in the Profit & Loss Account - Capital gains tax - Difference between sale price and revalued price at which the shares were shown in the books of account - HELD THAT:- Though there was capital gain on sale of shares under the Income-tax Act, 1961 the sale proceeds were invested in specified securities under section 54EA and hence the capital gain which would otherwise have been chargeable to tax stood exempted from capital gains tax. Shares of one company were sold and shares of another company, which were also specified securities u/s 54EA of the Income-tax Act, were acquired. The Accounting Standards referred to in the assessment order were incorporated in section 211 of the Companies Act with effect from October 1998 and hence were not applicable for preparation of accounts under the Companies Act for the previous year under consideration. Nothing has been brought to our notice to suggest that the accounts of the assessee-company prepared and submitted before the Assessing Officer were either rejected or modified by the authorities under the Companies Act or not approved/adopted in the Annual General Meeting of the assessee-company. Thus, the book profit of shown in the accounts of the assessee-company stood not only certified by the statutory auditors of the assessee-company but also accepted by all concerned under the Companies Act. In the case before us, the accounts as also the book profits shown therein are duly certified by the statutory auditors of the assessee-company and the impugned adjustments sought to be made by the Assessing Officer are also not authorized by Explanation to sub-section (2) of section 115JA which is similar to Explanation to section 115J. Hence, the adjustments made by the Assessing Officer to the book profit shown by the assessee in the Profit & Loss Account cannot be sustained in law. Having considered all the facts and circumstances of the case before us in the light of the law laid down by the Hon’ble Supreme Court in Apollo Tyres Ltd.’s case [2002 (5) TMI 5 - SUPREME COURT] and the Hon’ble jurisdictional High Court in Kinetic Motor Co. Ltd.’s case [2003 (1) TMI 47 - BOMBAY HIGH COURT], wherein an identical issue was involved and decided against the Department, we find no merit in the appeal filed by he Department. Appeal filed by the Revenue is, therefore, dismissed.
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