TMI Blog2008 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... 002 - - - Dated:- 20-2-2008 - C. N. RAMACHANDRAN NAIR and T. R. RAMACHANDRAN NAIR JJ. P. Balachandran and Smt. Preetha S. Nair for the appellant. P. K. R. Menon and George K. George for the respondent. JUDGMENT C . N. RAMACHANDRAN NAIR J. - This is an appeal filed by the assessee under section 260A of the Income-tax Act, 1961 challenging the order of the Income-tax Appellate Tribunal disposing of the appeal filed against the assessment for the year 1989-90. The substantial questions of law arising from the order under challenge are the following: "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the capital gains is part of the book profits und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department, reversed the order of the first appellate authority and held that long-term capital gains form part of the book profit. It is against this order of the Tribunal, the assessee filed this appeal raising the above questions. 3. We have heard Shri P. Balachandran, learned senior counsel for the appellant and Shri P. K. R. Menon, learned senior counsel for the respondent. Learned senior counsel for the assessee contended that capital gains under section 45 of the Act is a profit arising on transfer of capital assets and though chargeable to income-tax, the benefit of deduction/exemption available on investments made in specified assets in terms of section 54E of the Act, cannot be denied to the assessee even if assessment is made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. While deductions, rebates allowances are available in the computation of income for normal assessment additions, deductions and adjustments except to the extent cover by the Explanation to section 115J(1A) are not available in the computation of book profit. In other words, once the Assessing Officer finds that income as computed under the provisions of the Act is less than 30 cent, of the book profit, he has to give up normal assessment and the Assessing Officer has to opt for the assessment under section 115J which does not provide for any deduction in terms of section 54E of the Act. The assessee has no case that the long-term capital gains are not profit not includible in the profit and loss account prepared in terms of Schedule V ..... X X X X Extracts X X X X X X X X Extracts X X X X
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