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TMI Blog2010 (3) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... arging 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 pro-visions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1997, but before the 1st day of April, 2001 (here-after in this section referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 advance tax is not attractable in cases of the fictional income as mentioned above. There-fore, logically payment of interest under section 234B and also interest on deferment of payment of interest under section 234C do not apply. This contention of the appellant did not find favour with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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. The Gujarat High Court has taken a similar view dealing with the case involving section 115J. However, he is fair enough to say that the Madras High Court has taken a contra view. It has not followed the Karnataka view which was affirmed by the Supreme Court. He, therefore, submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plated 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 be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pronouncement of the Supreme Court itself by ratification. The position of law in this regard has been correctly propounded by the Karnataka High Court in the case of CIT v. Nilgiri Tea Estate Ltd. reported in [2009] 312 ITR 161. In paragraph 8, it is stated that even tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh 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 case of a regular appeal which after having admitted and hearing the same dismissed it. According to the scheme of the article 136 of the Constitution of India, grant or refusal of special leave is a matter of discretion. It is examined at the threshold whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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