Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (6) TMI 738 - GAUHATI HIGH COURT

2016 (6) TMI 738 - GAUHATI HIGH COURT - [2016] 384 ITR 364 - MAT liability under section 115JB - ITAT set aside the computation of the Assessing Officer (AO), taxing the book profit, in accordance with section 115JB of the Income-tax Act - Held that:- In the instant case, there was no determination of the Assessing Officer that the final accounts of the assessee were not prepared in accordance with the Schedule VI to the Companies Act. Hence the determination of liability for payment of minimum .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wn making and the assessee could not be held liable to tax for non-disclosure of the income which the assessee had returned but adjusted against brought forward losses. We find such observation of the Tribunal with regard to the procedure adopted by the Assessing Officer, is consistent with the ratio of Apollo Tyres Ltd. (2002 (5) TMI 5 - SUPREME Court ), Malayala Manorama Co. Ltd. v. CIT reported in [2008 (4) TMI 20 - SUPREME COURT ] and also this court's decision in Amines and Plasticizers Ltd .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion 260A of the Income-tax Act, 1961 (hereinafter referred to as the "I.T. Act") whereby the Commissioner of Income-tax in short the Commissioner of Income-tax, challenges the order dated February 9, 2012 (Annexure C) of the Income-tax Appellate Tribunal, Guwahati Bench in the I. T. A. No. 79/Gau/2010. By the impugned order, the Appellate Tribunal allowed the application filed by the respondent, hereinafter referred to as "the assessee", and set aside the computation of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

furniture business had shown total income at ₹ 24,15,43,513 (sale of furniture at ₹ 65,02,788 plus other miscellaneous income at ₹ 23,50,40,725) and calculated net profit at ₹ 7,95,62,134. However as per the audited profit and loss account submitted, the assessee disclosed a net loss of ₹ 4,08,72,066. Thus they were asked to explain the variation in the return submitted electronically and the audited accounts. 4. The assessee explained that since this was the first .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r section 115JB of the Income-tax Act. 5. As the assessee had shown net profit at ₹ 7,95,62,134 and in the audited profit and loss account, a net loss of ₹ 4,08,72,066 was reflected, the MAT liability under section 115JB was assessed at ₹ 86,78,955, by the Assessing Officer on December 30, 2008 (annexure A). 6. The aggrieved assessee then approached the Commissioner of Income- tax (Appeals) to challenge the determination of book profit under section 115JB of the Income-tax Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

book profit. Thus it was declared that the Assessing Officer committed no error in rejecting the revised return of income because it was filed after expiry of the statutory time limit and accordingly the assessment for payment of minimum alternate tax under section 115JB of the Income-tax Act, was upheld through the order dated February 9, 2010 (annexure B), by the Commissioner of Income-tax (Appeals). 7. Aggrieved by the decision of the Commissioner of Income-tax (Appeals), the assessee approac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ase of tinkering with the audited accounts, submitted by the assessee. 8. The Income-tax Appellate Tribunal considered the jurisdictional power of the Assessing Officer in computing the minimum alternate tax under section 115JB of the Income-tax Act and noted that the accounts furnished by the assessee are audited and certified, in accordance with Parts II and III of Schedule VI to the Companies Act, 1956. Hence it was opined that the figures of the said return should be accepted and there shoul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

yment of tax is made by section 115JB of the Income-tax Act and in such cases where the tax liability of a company is less than 7.5 per cent. (10 per cent. for the assessment year 2007-08) of the book profit, such book profit shall be deemed to be the total income of the assessee and tax became payable on such income. The total amount of income is to be computed under the Income-tax Act on the basis of return furnished by the assessee and necessary determination is required to be made by followi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

if the audited accounts satisfy the requirement of Parts II and III of Schedule VI to the Companies Act, 1956, the Income-tax Officer has no jurisdiction to re-determine the book profit under section 115J of the Income-tax Act, by substituting the figures incorporated in the audited return filed by the assessee. 12. Section 115JB was introduced in the Income-tax Act with a deeming provision which makes a company liable to pay tax on its book profit as reflected in their own audited accounts and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ower of examining whether the books of account are certified by the authorities, as having been properly maintained in accordance with the requirement of the Companies Act. When such books of account are produced, the Assessing Officer has limited power of making appropriate correction in accordance with the Explanation to section 115JB. To put it differently the Assessing Officer does not have the jurisdiction to go behind the net profit reflected in the profit and loss account except to the li .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the same to be scrutinized and certified by statutory auditors and will have to be approved by the company in its general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and satisfy that the accounts of the company are maintained in accordance with the requirements of the Companies Act. In spite of all these procedures contemplated under the provisions of the Companies Act, we find it difficult to accept the argument of the Re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of account of the company . . . Therefore, we are of the opinion, the Assessing Officer while computing the income under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the As .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

6 Act. No dispute has been raised at any stage of the proceedings by the Revenue that the profit and loss account of the assessee is not in compliance with the provisions of the 1956 Act, particularly Sch. VI, Parts II and III. In Sch. VI, there is no reference to sections 205 and 350 or Sch. XIV to the 1956 Act." 15. Following the ratio enunciated by the Supreme Court in the above case, our High Court in Amines and Plasticizers Ltd. v. Deputy CIT (Assessment) reported in [2008] 296 ITR 727 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rofit and loss accounts have been prepared as per relevant provision of the Companies Act, 1956 and the same is not in dispute. Regular accounting procedures have been followed. The directors' opinion shows that as against doubtful debts of ₹ 51,79,064 and doubtful advance of ₹ 2,40,132, as sum of ₹ 11,52,221 has been provided for during the assessment year, as considered adequate by the management in view of the continued efforts for recovery. Therefore, the claim of the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e behind the figures in the profit and loss account, certified by the statutory auditors of the assessee. 17. When the profit and loss account for the relevant years were prepared in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956, the reference to any other figure than what is reflected in the audited profit and loss account, for determination of the book profit under section 115JB by the Assessing Officer would not be justified. But we find here tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version