TMI Blog2004 (6) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to the above section, only amount of income-tax paid or payable under the provision therefore is required to be added to the profit as per the P L a/c, it cannot be said that for the purpose of above section interest paid to IT Department is also to be added. Further, in view of definition of term tax given in s. 2(43) of the IT Act and also in view of number of other provisions of the Act, interest payable is distinct and separate from the tax. (ii) That the Hon ble CIT(A) has erred in holding that the AO has been legally right in making adjustment in respect of interest paid to IT Department, while determining "book profit" for the s. 115JA of the Act vide intimation under s. 143(1)(a) of the IT Act and particularly, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. He was of the view that Expln. (a) of s. 115JA requires income-tax paid or payable under the provisions thereof is to be added back. He stated that a large number of judgments are available in the context of s. 40(a)(ii) which is similar to the provision of Expln. (a) to s. 115JA. The jurisdictional High Court of Delhi in the case of Bharat Commercial Industries Ltd. vs. CIT (1985) 45 CTR (Del) 1 : (1985) 153 ITR 275 (Del) following the Supreme Court decision in Mahalakshmi Sugar Mills vs. CIT (1980) 16 CTR (SC) 198 : (1980) 123 ITR 429 (SC) held that interest under various provisions of the IT Act should be treated as part of the tax for the purposes of s. 40(a)(ii) of the Act. He, therefore, was of the view that these judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m is payable in consequence of any order passed under this Act, the AO shall serve upon the assessee a notice of demand as prescribed. The provisions for imposition of penalty and interest are distinct from the provisions for imposition of tax." 6. Another decision relied is Bhor Industries Ltd. Ors. vs. CIT (1961) 42 ITR 57 (SC) wherein it has been held as under: "The words of the sub-section are clear to show that interest as interest is added to the tax as determined. There is nothing to show that it is to be treated as tax, and it thus retains its character of interest but is recoverable along with the tax. Indeed, s. 29 of the IT Act makes a distinction between tax, penalty and interest. Since s. 23A speaks of deduction only of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, to denote that each is distinct and independent of the other. Hence, tax cannot be equated to penalty or interest." 10. The learned counsel in respect of prima facie adjustment has relied upon the decision of Delhi High Court in the case of Samtel Color Ltd. vs. Union of India Ors. (2002) 177 CTR (Del) 289 : (2002) 258 ITR 1 (Del) and in respect of additional tax reliance has been placed on the decision of CIT vs. Hindustan Electro Graphites Ltd. (2000) 160 CTR (SC) 8 : (2000) 243 ITR 48 (SC) wherein it has been held as under: "Sec. 2(43) of the IT Act defined "tax" during the relevant period as income-tax and super-tax chargeable under the provisions of that Act. Therefore, what is levied under the charging provision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Chemicals Travancore Ltd. has observed that Expln. (a) of s. 115JA of the Act mentions only the amount of income-tax paid or payable. That does not include interest. Insofar as interest on income-tax is not mentioned in this section, this cannot be added under s. 115JA of the Act. It, therefore, came to the conclusion that the addition of interest on income tax cannot be made. However, in the impugned order, the learned CIT(A) relied on the decision of Bharat Commerce Industries Ltd. which was in the context of deduction as an expenditure for the purpose of earning any income or profit but not about the deemed income under s. 115JA, which provision has to be construed strictly. In that view of the matter, the learned CIT(A) is found t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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