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2015 (10) TMI 397 - ALLAHABAD HIGH COURT

2015 (10) TMI 397 - ALLAHABAD HIGH COURT - TMI - MAT - Book profit - whether the Assessing Officer while assessing a Company for income-tax under Section 115J of the Income Tax Act could question the correctness of the profit and loss account prepared by the assessee-company and certified by the statutory auditors of the company as having been prepared in accordance with the requirements of Parts II and III of Schedule VI to the Companies Act? - Held that:- Tribunal should not place reliance on .....

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the company. Therefore, the question of remitting the matter to the Tribunal does not arise.

In our view the controversy involved in the present appeal is squarely covered by the decision of the Supreme Court in the case of Apollo Tyres (2002 (5) TMI 5 - SUPREME Court) that there cannot be two incomes, one for the purpose of the Companies Act and another for the purpose of income-tax. We are of the opinion that the provision of Section 115J does not empower the Assessing Officer to e .....

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r the assessment year 1988-89, the assessee filed a return declaring a loss. The return was not accepted and the Assessing Officer passed an assessment order under Section 143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act) after making certain additions and disallowances under various heads. Being aggrieved, the assessee filed an appeal, which was partly allowed. The matter was taken to the Tribunal. The Tribunal allowed the appeal against which the Department has filed the p .....

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, disallowed the excess depreciation and added that amount in the profit & loss account. The assessee's appeal against this part was rejected by the appellate authority but was accepted by the first Tribunal relying upon the decision of the Supreme Court in the case of Apollo Tyres Ltd. Vs. Commissioner of Income-Tax, (2002) 255 ITR 273 (SC). The Tribunal held as under: "We have considered the rival submissioin and the decisions relied upon by the ld. A.R. Since the Revenue has not .....

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I and III of Schedule-VI to the Companies Act, the Assessing Officer was justified in revising the net profit under Section 115J of the Act. The Supreme Court in Apollo Tyres (Supra) considered the question as to whether the Assessing Officer while assessing a Company for income-tax under Section 115J of the Income Tax Act could question the correctness of the profit and loss account prepared by the assessee-company and certified by the statutory auditors of the company as having been prepared i .....

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ection 115J had only the power of examining whether the books of account were certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter had a limited power of making increases or reductions as provided for in the Explanation to the said Section. The Supreme Court, consequently, held that the Assessing officer did not have the jurisdiction to go behind the net profit shown in the profit and loss a .....

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aterial available in record. We cannot substitute our opinion for that of the Tribunal unless it is found that the conclusion drawn by the Tribunal is based on incorrect facts or irrelevant or impermissible by law. It is not disputed that the books of account are duly certified by the authorities under the Companies Act and profit and loss account has been properly maintained in accordance with Parts II and III of Schedule VI to the Companies Act, 1956. Depreciation was claimed on the revaluatio .....

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fit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J of the Act. We are of the opinion that the provision of Section 115J does not empower the Assessing Officer to embark upon a fresh inquiry in regard to the entries made in the books of account of the company. The Supreme Court has categorically held in Apollo Tyres (Supra) that there cannot be two incomes, one for the purpose of the Companies Act and another for the purpose of income-tax. Le .....

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