TMI Blog2011 (12) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 148. 3 On the facts and circumstances of the case, the CIT(A) has erred that b/f depreciation along with the current year depreciation was liable to be excluded for working out the eligible profit for computing the exemption u/s 10B to be reduced from the book profit. 4 The appellant may be allowed to alter, amend, modify, add or any grounds of appeal during the appellate proceedings. 2. Facts, in brief, as per relevant orders are that return declaring nil income filed on 25.11.2003 by the assessee after being processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act) was selected for scrutiny with the service of notice U/s 143(2) of the Act. Subsequently, assessment was complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout going into the legality of notice issued u/s 148 of the Act ,concluded that there was no mistake in payment of tax liability u/s 115JB of the Act . The findings of the ld. CIT(A) read as under:- The reasons for difference in computation of exemption u/s 10B for the purpose of regular provisions and under MAT is because of claim of depreciation. Prescribed rate of depreciation under I.T. Rules and under Companies Act are different. The balance sheet is prepared as per schedule-VI to the Companies Act 1956 after taking into consideration stipulated rate of depreciation as provided in the Companies Act. However, in case of regular assessment, depreciation is required to be considered as per income tax rules, which provide for diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of tax liability u/s 115JB by the appellant. In view of above directions, it is not necessary to adjudicate the legal ground. The ground regarding charge of interest is of consequential nature and Assessing Officer may give relief as per law. 4. The Revenue is now in appeal before us against the aforesaid findings of ld. CIT(A). The ld. DR supported the findings of the AO while the learned AR on behalf of the assessee relied upon the impugned order in the light of decision of Hon ble Kerala High Court in CIT vs. Dynamic Orthopedics Pvt. Ltd. ,257 ITR 446. To a query by the Bench, the ld. AR pointed out that the assessee is not in appeal before the ITAT. 5. We have heard both the parties and gone through the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The findings of the Hon ble High Court read as under: Sub-section (1A) of the Act says that every assessee, being a company, shall, for the purpose of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act. The argument of learned counsel for the assessee is that the respondent being a private company, the preparation of its profit and loss account for the relevant previous year in accordance with the provisions of Part II of Schedule VI to the Companies Act is not applicable. Section 350 of the Companies Act, 1956, states as follows: The amount of depreciation to be deducted in pursuance of clause (k) of sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue gain of approximately ₹ 75 crores . Section 115J of the Act broadly makes applicable to the assertible depreciation at the rates prescribed in Schedule VI. Thus, this provision is incorporated in the Act. Section 355 of the Companies Act cannot be made applicable in such cases. We are of the view that depreciation has to be calculated as stated in section 350 of the Companies Act. 5.1 Even otherwise, in view of decision of the Hon ble Apex Court in Apollo Tyres Ltd. Vs. CIT,255 ITR 273, the AO, while assessing a company for income tax under section 115J of the Act, cannot question the correctness of the profit and loss account prepared by the assessee-company and certified by the statutory auditors of the company as ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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