TMI Blog2006 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal was right in holding that interest under Section 234A, 234B and 234C of the Income Tax Act, 1961 cannot be levied in cases where the assessment was on the basis of book profits under Section 115J of the Act?" 2. The relevant assessment year is 1989-90. The respondent/assessee is a closely held company carrying on business in textiles. The assessee filed its return of income for the assessment year 1989-90 admitting Nil total income. The Assessing Officer passed an assessment order dated 27.3.1992 under Section 143(2) of the Income Tax Act (for brevity "the Act"), computing the book profit under Section 115J of the Act as Rs.17,90,717/- and arrived at the income of Rs.5,39,670/-, taking a stand that the unabsorbed loss o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was held that interest under Sections 234B and 234C of the Act is chargeable even in a case where assessment is made under Section 115J of the Act; (ii) the decision of the Madhya Pradesh High Court in Itarsi Oils and Flours Pvt. Ltd. Vs. Commissioner of Income-tax, [2001] 250 ITR 686, wherein it was held that Sections 234B and 234C of the Act do not make any reference to Section 115J of the Act. Section 234B lays down that where advance tax is required to be paid and there is failure to pay or if the amount of tax paid is less than 90 per cent. of the assessed tax, then the assessee is liable to pay interest. Similarly, under section 234C of the Act, a company shall be liable to pay simple interest for a period of three months on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment due to the computation of income under section 115J of the Act attracts the levy of interest under sections 234B and 234C of the Act and that the estimation of current income does not exclude the income computed under section 115J of the Act. 6. Section 115J of the Income Tax Act, which provides special provisions relating to certain companies, contemplates the companies mentioned thereunder to prepare the profit and loss account for the relevant previous year under sub-section (1A) to Section 115J of the Act. 7. Of course, in Kwality Biscuits Ltd. v. CIT [(2000) 243 ITR 519], the Karnataka High Court held that since the entire exercise of computing the income or that of book profit could be only at the end of the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or short payment due to the computation of income under section 115J of the Act, interest can be levied under sections 234B and 234C of the Act and dissented from the view taken by the Karnataka High Court in Kwality Biscuits Ltd. Case, cited supra. 10. Even though it is brought to our notice that the decision of the Apex Court in Commissioner of Income-tax v. Kwality Biscuits Ltd., [(2006) 284 ITR 434], confirming the decision of the Karnataka High Court in Kwality Biscuits Ltd. v. CIT [(2000) 243 ITR 519], we find that the Apex Court has only dismissed the appeal. It is a settled law that dismissal simpliciter would not be a declaration of the law and it would not be a binding precedent (vide: Saurashtra Oi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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