TMI Blog2011 (3) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- Assessing Officer has to start assessment by adopting the profit available in the profit and loss account prepared in terms of Parts II and III of Schedule VI to the Companies Act. - If the assessee has made a claim of deduction from this profit not enumerated in clauses (i) to (ix) covered by the Explanation to section 115JA, the assessment so completed based on the profit taken from the profit and loss appropriation account submitted by the assessee happens to be an apparent mistake which could be rectified in proceedings to be initiated under section 154, appeal dismissed - 74 of 2010 - - - Dated:- 3-3-2011 - RAMACHANDRAN NAIR C. N., HARUN-UL-RASHID, JJ. JUDGMENT C. N. Ramachandran Nair J.- 1. The appeal by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Commissioner of Income-tax (Appeals) verified the profit and loss account prepared under Parts II and III of Schedule VI to the Companies Act and noticed that the profit available in the said profit and loss account was Rs. 1,01,37,664. The debit made towards prior period expenses was not in the profit and loss account prepared under the Companies Act as stated above but the deduc- tion was shown in the profit and loss appropriation account which is not relevant for the purpose of assessment under section 115JA of the Act. Even though the assessee relied on the decision of the Supreme Court in Apollo Tyres Ltd. v. CIT reported in [2002] 255 ITR 273 (SC), the Commissioner of Income-tax (Appeals) held that the assessee has claimed a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst section 115JA of the Act and, there- fore, the Tribunal rectified their earlier order and upheld the order of the Commissioner of Income-tax (Appeals) confirming the rectification order passed by the Assessing Officer under section 154 of the Act. It is against this order of the Tribunal passed under section 154 the assessee has filed the appeal. 3. There is no dispute on the factual position inasmuch as the profit avail- able as per the profit and loss account prepared by the assessee in terms of Parts II and III of Schedule VI to the Companies Act based on which assess- ment under section 115JA has to be made was Rs. 1,01,37,664. The only question to be considered is whether the assessee is entitled to deduction of the prior per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is bound to accept the profit and loss account prepared in terms of the above provisions of the Companies Act. The assessee also does not dispute the fact that the profit available under the profit and loss account prepared under the Companies Act is Rs. 1,01,37,664. However, the assessee's contention is that the debit of the prior period expenses made in the profit and loss appropriation account should also be allowed as a deduction. We are unable to accept this contention because the MAT assessment has to be completed strictly in terms of the statutory provisions which is as follows : "115JA. Deemed income relating to certain companies.-(1) Not- withstanding anything contained in any other provisions of this Act, where in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of this clause, the loss shall not include depreciation ; or (iv) the amount of profits derived by an industrial undertaking from the business of generation or generation and distribution of power ; or (v) the amount of profits derived by an industrial undertaking located in an industrially backward State or district as referred to in sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA, for the assessment years such industrial undertaking is eligible to claim a deduction of hundred per cent., of the profits and gains under sub-section (5) of section 80-IA ; or (vi) the amount of profits derived by an industrial undertaking from the business of developing, maintaining and operating any infr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loss account admittedly is Rs. 1,01,37,664. The way the assessee has claimed deduction based on the profit and loss appropriation account is detailed in the order of the Commissioner of Income-tax (Appeals). What is clear from the said order is that the assessee made a further deduction from the profit available under the profit and loss account prepared under the Companies Act. Obviously, unless the deduction made by the assessee is permissible in terms of clauses (i) to (ix) of the Explanation to section 115JA abovestated, the same is inadmissible. The assessee has no case that the prior period expenses is an item that could be deducted from the profit in terms of any of the clauses covered by the Explanation to section 115JA. So much ..... X X X X Extracts X X X X X X X X Extracts X X X X
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