2008 (10) TMI 723 - AT - Income Tax

Assessee's appeal partly allowed on section 115JB, dividends issue upheld. Costs claim dismissed as not pressed.

The appeal filed by the assessee was partly allowed as the Tribunal found in favor of the assessee regarding the applicability of section 115JB and the ... Minimum alternate tax - book profit - deemed total income based on book profit - gross total income - application of section 115JB - binding precedent of the jurisdictional High Court and TribunalMinimum alternate tax - application of section 115JB - gross total income - book profit - binding precedent of the jurisdictional High Court and Tribunal - Whether section 115JB was leviable where the assessment recorded nil total income and no tax was payable under normal provisions - HELD THAT: - The Tribunal examined the contention of the assessee that the matter was covered by the Tribunal's decision in CIT v. Vishnu Sugar Mills Ltd., which was upheld by the Calcutta High Court. The Departmental Representative's objections-that the High Court decision related to section 115JA, that Apex Court decisions were not considered, and that sub section (2) of section 115JB was not taken into account-were examined and rejected. The Members found that the question before the High Court and Tribunal in Vishnu Sugar Mills related to applicability of section 115JB where there was no assessed gross total income, and that the Tribunal in that case had considered the authorities relied upon, including Apollo Tyres and sub section (2) of section 115JB. The Tribunal therefore followed the binding jurisdictional precedent and held that section 115JB was not applicable in the facts of the present case, allowing the grounds raised by the assessee. [Paras 6]Grounds 1 and 2 allowed; section 115JB not leviable in the circumstances of this assessment.Discretion to award costs - Claim for costs under section 254(2B) of the Income tax Act - HELD THAT: - The assessee sought costs of the appeal under the Tribunal's discretion. The Tribunal recorded that this ground was not pressed by the assessee at hearing and accordingly did not grant costs. [Paras 7]Ground No.3 dismissed as not pressed.Final Conclusion: The appeal is partly allowed: the Tribunal set aside the levy under section 115JB for Assessment Year 2005-06 by following the binding jurisdictional precedent, while the claim for costs was dismissed as not pressed. Issues involved:The issues involved in this case are:1. Applicability of section 115JB on the assessee's income calculation.2. Whether the assessee's failure to declare dividends affects the applicability of section 115JB.3. Claim for costs of appeal under section 254(2B) of the Income-tax Act, 1961.Issue 1: Applicability of section 115JB:The assessee, engaged in Share Dealing and Investment, declared a loss but earned a net profit as per the Profit & Loss Account. The assessing officer determined the Book Profit under section 115JB, leading to a tax liability. The CIT(A) upheld this decision. The assessee contended that the issue was covered by a Tribunal order and a High Court judgment in favor of the assessee, citing the case of CIT - Vs- Vishnu Sugar Mills Ltd. The Departmental Representative objected, arguing that the previous judgments did not consider section 115JB and relevant Supreme Court decisions. The Tribunal found the objections invalid, stating that the High Court judgment did indeed pertain to section 115JB, and upheld the appeal on this ground.Issue 2: Impact of Undeclared Dividends on section 115JB:The assessee argued that since no dividends were declared, section 115JB should not apply, citing a specific case. The Departmental Representative raised objections based on different sections and court decisions. The assessee countered, asserting that the High Court judgment in question specifically related to section 115JB. The Tribunal found in favor of the assessee on this issue as well.Issue 3: Claim for Costs of Appeal:The assessee sought costs of appeal under section 254(2B) due to alleged non-compliance with binding judgments by lower authorities. However, this ground was not pressed and was consequently dismissed.In conclusion, the appeal filed by the assessee was partly allowed based on the findings related to the applicability of section 115JB and the impact of undeclared dividends. The claim for costs of appeal was dismissed.