TMI Blog2005 (4) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 2. In computing its taxable income, the assessee company has claimed the deduction available under section 32AB. In its profit and loss account prepared for the relevant previous year, the assessee-company has credited an amount of Rs. 25,60,000 by way of 'provisions written back'. This amount of Rs. 25,60,000 credit to the profit and loss account also formed part of the eligible profits computed by the assessee-company for the purpose of claiming deduction under section 32AB. The assessment was completed accepting the above computation made out by the assessee company. The deduction under section 32AB was accordingly allowed by the assessing authority. 3. On perusal of the assessment records, the Commissioner of Income-tax found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority as a deduction for the assessment year 1986-87 on payment basis. Similarly another amount of Rs. 40,000 was allowed for the assessment year 1987-88, again on the basis of actual payment. Thus, in total a sum of Rs. 4,40,000 was paid by the assessee-company towards the disputed wages and the said amount was allowed by the assessing authority in completing the relevant assessments. The amount of Rs. 25,60,000 is the unused balance in the provision already made in the account. As the provision was no longer required, the assessee has written back the amount of Rs. 25,60,000 in its account by crediting the profit and loss account. The assessee submitted before the Commissioner of Income-tax that the said adjustment did not fall wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts are credited to the profit and loss account. 6. It is the contention of the learned counsel that as far as the present case is concerned, the question of reducing the profit by any amount withdrawn from reserves or provisions need to be considered in the light of clause (v) of sub-section (3) of section 32AB which relates to increasing the profit by the amount set aside to any provisions for meeting liabilities. The learned counsel explained that the question of reducing the provisions written back would arise only in such a case where the said amount of provision has already been considered in the earlier assessment year/s for increasing the profit of the assessee-company for the purpose of section 32AB. If the amount of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule VI to the Companies Act, for the purpose of section 32AB, have been clearly laid down by the Act itself. The Act has listed out the items by which the profit has to be increased or decreased. The items are clearly spelt out. Once, the language used in a provision of law is clear and unambiguous, there is no need of straining for any interpretation. One should follow the plain language of the provisions of law. No intendment is called for in such circumstances. 9. The learned Commissioner invited our attention to the relevant provisions contained in sub-section (3) of section 32AB. He explained that the law has listed out (i) to (vii) items by which the profits computed by the assessee-company in accordance with the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation computed in accordance with the provisions of sub-section (1) of section 32 from the amounts of profits computed in accordance with the requirements of Parts II and III of Schedule VI 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, the law has not provided any further conditions or stipulations thereto. The rule relating to reducing the profit reads that if the assessee has withdrawn any amount from any reserves or provisions and such amounts withdrawn are credited to the profit and loss account, then such amounts shall be reduced from the hitherto adjusted profit of the assessee-company. There is no condition stated in the law that such amounts shall be reduced only if the said amounts were considered for increasing the profit of the assessee in the earlier assessment years, for the purpose of section 32AB. Such a mutual relation is not contemplated in the provisions of law relating to adjustments given in sub-section (3) of section 32AB. Therefore, as nothing is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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