TMI Blog2000 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 115J of the Income-tax Act, 1961. The above section was introduced by the Finance Act, 1987 (Act No. 11 of 1987). It was introduced as a special provision relating to certain companies for taxation of companies whose total income is computed less than 30 per cent. of their book profits. According to the petitioners, the above provision seeks to tax hypothetical income not accrued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is submitted that, levy of additional tax under section 143(1A) is also illegal and no interest can be charged under section 234B on the above. The object of the insertion of section 115J of the Income-tax Act, 1961, was to ensure levy of minimum tax on what are known as "prosperous zero tax companies". Under the scheme of the section, where the total income of companies as computed under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are making huge profits and also declaring substantial dividends, but are managing their affairs in such a way as to avoid payment of income-tax, as a result of various tax concessions and incentives and for that purpose, the taxable income is determined under sub-section (1) of section 115J. An assessee is enabled to claim carry forward and set-off of losses, unabsorbed allowance in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious concessions and allowances are given as per various provisions enabling the companies to arrange their tax affairs in such a way as to become "zero tax" companies and the Legislature by this section restricted or curtailed or limited such concessions to the extent as provided in section 115J so that they can pay some tax. This is not unreasonable so as to make it violative of article 14 or 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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