TMI Blog2021 (8) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... d liabilities as provided in clause (g) of explanation to sub-section (2) of Section 115JA of the Act. This amount which was earmarked as a provision of diminution in the value of the asset for the purposes of arriving at book profit under Section 115JA of the Act, ought to have been included in view of retrospective operation of clause (g) to sub-section (2) to Section 115JA of the Act. Similar view has been taken by another Division Bench of this Court in COMMISSIONER OF INCOME-TAX Vs. WEIZMANN HOMES LTD . [ 2013 (5) TMI 123 - KARNATAKA HIGH COURT] Tribunal has rightly held that the aforesaid amount has to be added back to book profits for the purpose of determining deemed income under Section 115JA of the Act as it is specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax? 2. Facts leading to filing of this appeal briefly stated are that assessee is a public limited company which is engaged in the business of leasing and accepting deposits from the public. The assessee filed its return of income for Assessment Year 1998-99. The Assessing Officer, while computing the book profit under Section 115JA of the Act, did not allow lease equalization charges and by orders dated 11.02.2015 and 29.01.2015 passed orders of assessment for Assessment Years 1998-99 to 2000-01, respectively. The assessee thereupon filed an appeal against the orders of assessment. The Commissioner of Income Tax (Appeals), by orders dated 08.03.2016 for Assessment Years 1998-99 to 2000-01, has deleted the addition on account of lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 464. 4. On the other hand, learned counsel for the revenue submitted that lease equalization charges is in the nature of provision for diminution in the value of assets and the aforesaid fact has been admitted by the assessee before this Court and the Tribunal has therefore rightly answered the issue whether the aforesaid amount can be added back to book profit under Section 115JA of the Act. In support of aforesaid submission, reliance has been placed on the decisions of the Supreme Court in 'APOLLO TYRES LTD. Vs. COMMISSIONER OF INCOME-TAX' (2002) 122 TAXMAN 562 (SC) AND 'COMMISSIONER OF INCOME-TAX Vs. WEIZMANN HOMES LTD.' (2013) 33 TAXMANN.COM 171 (KAR). 5. We have considered the submissions made on both si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of 1956): Provided further that where a company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956) which is different from the previous year under the Act, the method and rates for calculation of depreciation shall correspond to the method and rates which have been adopted for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year. Explanation .-For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub section (2), as increased by- (a) the amount of income-tax paid or payable, and the provision therefor; or (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de a provision of ₹ 11,09,04,763/- on account of lease equalization charges. The aforesaid provision was made for meeting the liabilities other than the ascertained liabilities as provided in clause (g) of explanation to sub-section (2) of Section 115JA of the Act. This amount which was earmarked as a provision of diminution in the value of the asset for the purposes of arriving at book profit under Section 115JA of the Act, ought to have been included in view of retrospective operation of clause (g) to sub-section (2) to Section 115JA of the Act. Similar view has been taken by another Division Bench of this Court in COMMISSIONER OF INCOME-TAX Vs. WEIZMANN HOMES LTD., supra. Therefore, the Tribunal has rightly held that the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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