TMI Blog2003 (11) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act afresh and for this purpose we set aside the orders of the Tribunal - - - - - Dated:- 17-11-2003 - Judge(s) : R. JAYASIMHA BABU., S. R. SINGHARAVELU. JUDGMENT The judgment of the court was delivered by R. JAYASIMHA BABU J.-The reference is at the instance of the assessee. The assessment year is 1987-88. The first question is concerned with the interpretation of section 32AB and as to whether it has been construed too narrowly by the Tribunal. The Tribunal has held that the exclusion of the amount of interest on securities, dividends and rents while making the computation under section 32AB of the Act was in accordance with section 32AB even though all those amounts form part of the computation that was required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in accordance with the requirements of Parts II and III of the Sixth Schedule to the Companies Act, 1956 (1 of 1956), as increased by the aggregate of-- (i) the amount of depreciation; (ii) the amount of income-tax paid or payable, and provision therefor; (iii) the amount of surtax paid or payable under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (iv) the amounts carried to any reserves, by whatever name called; (v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; (vi) the amount by way of provision for losses of subsidiary companies; and (vii) the amount or amounts of dividends paid or proposed, if any debited to the profit and loss account; and as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that: "The profit and loss account shall set out the various items relating to the income and expenditure of the company arranged under the most convenient heads; and in particular, shall disclose the following information in respect of the period covered by the account:..." inter alia, as set out in clause 3(xi): "3. (xi)(a) The amount of income from investments, distinguishing between trade investments and other investments. (b) Other income by way of interest, specifying the nature of the income. (c) The amount of income-tax deducted if the gross income is stated under sub-paragraphs (a) and (b) above." The income by way of interest as also income from investment, which would include dividend, are clearly amounts which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to give effect to the plain language and the mandate of section 32AB(3). Learned counsel for the Revenue however sought to sustain the order of the Tribunal which has upheld the assessment made by the Assessing Officer by relying on the decision of the High Court at Gauhati in the case of CIT v. Dinjoye Tea Estate (P) Ltd. [1997] 224 ITR 263 which decision was followed by the Calcutta High Court in the case of CIT v. Warren Tea Ltd. [2001] 251 ITR 382. Having perused both the judgments, with great respect, we are unable to subscribe to the views expressed therein. In the Gauhati case at page 266, the argument that the assessee's counsel had advanced with regard to section 32AB, though set out, was not considered on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance tax was Rs. 1,98,00,000. The estimation of income when it paid the third instalment was Rs. 2,65,60,000. The assessee had explained the reasons for these varying estimates by stating that in the accounts for the year ended August 31, 1986, it had been decided to write off interest capitalised and that while filing the advance tax estimates in June as also in September of 1986, the amount of interest to be capitalised and written off was estimated at a figure of Rs. 70,00,000. However, after the accounts for the year ending August 31, 1986, was finalised, it was found that the interest charged, to be capitalised and written off was only Rs. 26,00,000 and the income therefore, had to be revised upwards by Rs. 44,00,000. The other rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er point of time would not by itself render the assessee liable for payment of interest. That is the reason why the section vests discretion in the Assessing Officer who is empowered either to levy interest or not to levy interest. On the facts of this case the reasons given by the assessee not having been found to be false and the assessee having revised its estimation, before it paid the third instalment and the assessee having paid the full amount on the basis of such re-estimation, the Assessing Officer was required to apply his mind as to whether at all the levy of interest was warranted. As the Assessing Officer has not taken note of all the factors that he was required to, we direct the Assessing Officer to examine the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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