TMI Blog2010 (3) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... ether on a true and proper interpretation of the relevant pro-visions of the Income-tax Act, 1961, the provisions relating to payment of advance tax are applicable in case where the total income is deemed to be 30 per cent. of the book profit under section 115JA and the Tribunal was justified in law in upholding the charging of interest under sections 234B and 234C in the appellant's case for the assessment years 1999-2000 and 2000-01 ?" 2. In this case we are concerned with section 115JA. It provides, amongst others, for computation of fictional income for the purpose of levying taxes. We are, therefore, appropriately quoting section 115JA which is part of Chapter XII-B. "115JA. (1) Notwithstanding anything contained in any other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year . . . (3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A. (4) 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." 3. It was the contention of the assessee that the payment of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of merger in this case will apply. There-fore, the ratio decided by the Karnataka High Court in Kwality Biscuits' case is now holding principle and is applicable in this case. He has drawn our attention to the judgment of the Bombay High Court, post-Supreme Court decision as above. Before the Bombay High Court case related to section 115JA, while accepting the judgment of the Karnataka High Court in Kwality Biscuits' case it was held that the provisions of sections 234B and 234C is not attracted in case of deemed income under section 115JA. Before the Kerala High Court following the said decision of the Karnataka High Court, it was held dealing with the case that the provisions under sections 115J, 115JA, 234B and 234C are not attracted. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re under the provisions of other part of the Act is made applicable by making a subsequent amendment. Hence, the liability of payment of advance tax is automatically attracted, sequally the payment of interest in case of defaulted or deferment of payment of interest as contemplated in sections 234B and 234C automatically applicable. 7. Heard respective contentions of the learned counsel at length. We have gone through the judgment of the learned Tribunal. Precisely the contention is whether the fictional income as mentioned in section 115JA in this case is attracted for payment of advance tax or not. Payment of advance tax is provided in sections 207 and 208 which is quoted hereunder:"207. Liability for payment of advance tax.-Tax shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nference can be drawn while interpreting any provision of the fiscal statute. It is true the Kwality Biscuits' case was dealt with under sections 115J, 115JA but the object and scheme of sections 115J and 115JA are almost same as in the judgment it has been held that deemed income is not attracted with the liability of payment of advance tax and this judgment was appealed against as we have noted above. The Supreme Court after admitting the appeal and having heard finally dismissed the same meaning thereby the judgment of the Karnataka High Court has been accepted and as such the principle of doctrine of merger will be applicable. When the Supreme Court by necessary implication accepts any pronouncement of any High Court it becomes the pron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held that sections 234B and 234C were not attracted. The Madras High Court judgment in our view has not exposed the correct position of law while taking note of the judgment of the Supreme Court dismissing the appeal against the judgment of the Karnataka High Court in Kwality Biscuits' case (supra). With respect the Division Bench of the Madras High Court observed that the one-line dismissal order of the Supreme Court is not the binding precedent and, therefore, the Division Bench differed with the decision of the Karnataka High Court in Kwality Biscuits' case. 12. With great respect to their Lordships the principle laid down therein applies in case of dismissal of a special leave petition with one-line order but does not apply in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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