TMI Blog1997 (9) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... the income under section 115J of the Income-tax Act, 1961? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the computation made by the Assessing Officer was not in accordance with the provisions of section 115J of the Income-tax Act, 1961?" The assessee is a private limited company and had filed its return of income showing an income of Rs. 5,94,820 as per the provisions of section 115J of the Income-tax Act, 1961 (for short "the Act"). The income without considering the provisions of section 115J of the Act was shown at Rs. 3,80,311. The Assessing Officer completed the assessment under section 143(3) of the Act on March 30, 1990. The total income without considering the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.---(1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of generation or distribution of electricity), the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 but before the 1st day of April, 1991 (hereafter in this section referred to as the relevant previous year), is less than thirty per cent. of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent. of such book profit. (1A) Every assessee, being a company, shall, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited to the profit and loss account, and as reduced by,--- (i) the amount withdrawn from reserves (other than the reserves specified in section 80HHD) or provisions, if any such amount is credited to the profit and loss account : Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988, shall not be reduced from the book profit unless the book profit of such year has been increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to certain companies and this provides that if the total income in respect of any previous year relevant to the assessment year commencing on or after April 1, 1988, is less than thirty per cent. of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent. of such book profit. Sub-section (1A) of section 115J of the Act provides that the assessee shall, for the purposes 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, 1956. Then it is provided in the Explanation to this sub-section how the profit is to be worked ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not correct. In this view of the matter, we are of the opinion that the view taken by the Tribunal does not appear to be justified. The Tribunal has not given any reason except that it has made a reference to the decision of the Income-tax Appellate Tribunal, Bombay. What was the reason given by the Bombay Tribunal has not been discussed in the order of the Tribunal. However, as we pointed out earlier that the provisions of the Companies Act stand incorporated by virtue of sub-section (1A) to section 115J, the assessee should have prepared the balance-sheet of profit and loss in terms of the Companies Act. Hence, the view taken by the Tribunal is not correct. Accordingly, we answer these questions of law in favour of the Revenue and aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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