TMI Blog2007 (6) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... er under section 154 of the Act was not bad in law and without jurisdiction. 2. That in the facts and circumstances of the case, the learned CIT(A) has erred, both in law and facts, in confirming the charging of tax on income computed under section 115JA of the Act at normal rate of tax in spite of the fact that total income included long term capital gains and provisions of section 115JA(4) read with section 112(1) of the Act should have been applied. 3. That in the facts and circumstances of the case, the learned CIT(A) has erred, both in law and facts, in confirming charging of interest under sections 234B and 234C of the Act on income determined under section 115JA of the Act." 3. Brief facts of the case are that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from record computed the income as per section 115JA of the Act at Rs. 1,12,09,852. He also revised the interest under sections 234B and 234C of the Act. Aggrieved, assessee filed an appeal before the CIT(A) who confirmed the order of the Assessing Officer. Aggrieved, assessee is in second appeal before us. 4. The ld. counsel for the assessee, Shri K. Shivram submitted that the assessee is engaged in the business of financing and activities of investment in shares and units of mutual fund, etc. According to him, the assessee filed its return of income at Rs. 24,55,690 and taxable income under section 115JA at Rs. 1,12,09,852. He drew our attention to page 3 of the paper book wherein the computation of income-tax under section 115JA is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with section 112(1) of the Act. Thus, according to the ld. counsel, the Assessing Officer has applied his mind to the provisions of section 112 as well as to the facts of the case and has taken a conscious decision to calculate the tax as per section 112(1) of the Act. He submitted that there was no mistake apparent from record warranting rectification under section 154. He further relied upon the various decisions in support of his contentions that rectification cannot be made on a debatable point. To drive home his point that this issue was debatable at that particular point of time, he relied upon the following decision : ( i ) ITO v. Frigsales (India) Ltd. [2005] 4 SOT 376 (Mum.), wherein it was held that receipt which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, relied upon the orders of the authorities below and submitted that where the deeming provisions of section 115JA are applied, provisions of section 112 are not applicable. He relied upon the decision of the Supreme Court in the case of Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273 1 , wherein it has been held that while determining the "book profits" under section 115J, the Assessing Officer could not recompute the profits in profit and loss account. According to him, in view of the law laid down by the Supreme Court, it is not a debatable issue. He submitted that "Book Profits" means net profit as shown in the profit and loss account prepared in accordance with Parts II III of Schedule VI to Companies Act and as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Frigsales (India) Ltd. ( supra ) stating that from the facts of that case it is not clear if the disputed amount has been included in the return of income. Hence, according to him, the said decision is not applicable to the facts of the present case. 6. In his rejoinder, the ld. counsel for the assessee drew our attention to sub-section (4) of section 115JA wherein it is provided that "save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company mentioned in this section." Thus, according to him, the provisions of section 112 are applicable to the facts of the case and the tax is to be calculated accordingly. 7. Having heard both the parties and having considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Ltd. ( supra ), has clearly held that the Assessing Officer is not empowered to interfere with the book profits calculated by the assessee except in the cases covered by the Explanation to section 115JA. The charge of income-tax @ 20 per cent is in respect of a particular head of income, i.e., long-term capital gains. But charge under section 115JA is not at all in respect of any head of income. In fact, headwise computation of income is clearly outside the scope of section 115JA. Charge of income-tax under section 115JA is in respect of book profit a part of which is deemed to be the total income of the assessee. The law requires the Assessing Officer to charge income-tax at the prescribed rate in respect of total income computed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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