TMI Blog2011 (3) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... CE P.P.S.JANARTHANA RAJA, JJ. For appellant : Mr.Ramachandran Senior Advocate for Dr.Anitha Sumanth For respondent : Mr.T.Ravikumar Standing Counsel for Income Tax JUDGMENT CHITRA VENKATARAMAN, J. The assessee has come on apeal as against the order of the Income Tax Appellate Tribunal, Madras "B" Bench, Chennai, made in I.T.A.No.1748/MDS/98 dated 14.07.2004 for the assessment year 1990-1991, raising the following substantial questions of law: " 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in reversing the order of the Commissioner of Income Tax (Appeals) without considering the question relating to the validity of the reassessment under Section 147 of the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income under Section 115J at Rs.5,26,720/- on 27.03.1998 by treating the profit on the sale of fixed assets as part of the profits for the purpose of Section 115J of the Act. 3. The assessee preferred an appeal against the order dated 27.03.1998 contending that the re-opening of the assessment is unwarranted after four years from the date of relevant assessment year. Quite apart, the conclusion arrived at by the Assessing Officer that the profit derived out of sale of fixed asset ought to have been credited to the profit and loss account was unsustainable. The Commissioner of Income Tax (Appeals), by order dated 21.04.1998, pointed out that the reopening of assessment was not in accordance with law and there was no failure attribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer was justified in bringing the sale of land and building, since the assessee had failed to disclose the profit on the sale of land and building in the Profit and Loss Account, but directly transferred it to the reserve account, which is against Clause 2(b) of Part II of Schedule VI of the Companies Act. The Tribunal pointed out that while computing the total income under the Income Tax Act, the assessee is required to take into account income by way of capital gains under Section 45 of the Income Tax Act. While computing the book profits under the Companies Act, the assessee has to include the capital gains for computing the book profits under Section 115J. In this connection, the Tribunal also relied on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Act, capital gains ought to have been included in the the computation of book profits. In the above circumstances, learned counsel appearing for the respondent submitted that the matter be remitted to the Tribunal to consider the issues raised by the Revenue. 7. A reading of the order of the Tribunal shows that all that the Tribunal considered in its order was only as regards the computation of book profits. Referring to the Bombay High Court decision reported in 249 ITR 597 (Commissioner of Income Tax Vs. Veekaylal Investments Company Private Limited), the Tribunal held that the capital gains on the sale of capital asset was liable to be included for the purpose of computing book profits and thereby allowed the Revenue's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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