TaxTMI 
TaxTMI 
2011 (3) TMI 1450
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....bsp; 2. The assessment involved is for the year 1997-98. The Assessing Officer accepted the loss return submitted by the assessee and, therefore, pro- ceeded to make MAT assessment on 30 per cent. of the book profit under section 115JA of the Act. The assessee disclosed a book profit of Rs.78,43,643 and accepting the same the Assessing Officer completed the assessment on 30 per cent. of the book profit, i.e., fixing the income at Rs.23,53,093. However, later the Assessing Officer noticed that the profit and loss account prepared by the assessee under Parts II and III of Schedule VI to the Companies Act disclosed a profit of Rs. 1,01,37,664, where- from the assessee had made a deduction of Rs. 23,29,726 towards prior period expenses which....
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.... which could be corrected under section 154. When the assessee filed a second appeal, the Tribunal initially allowed the same without considering the case on the merits, but by holding that admissibility of item of expenditure towards deduction in the computation of book profit under section 115JA is a debatable point on which no rectification can be made under section 154 of the Act. The appeal filed by the assessee was accordingly allowed by the Tribunal. However, the Department filed a rectification application pointing out the scheme of assessment under section 115JA to the Tribunal wherein the basis to be adopted is the profit as shown in the profit and loss account prepared under the above provisions of the Companies Act and therefrom....
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.... 154 of the Act. Counsel for the assessee relied on several decisions including that of the Supreme Court in Apollo Tyres' case [2002] 255 ITR 273 (SC) referred to above. The other decisions relied on by the assessee's counsel are that of the Delhi High Court in CIT v. Khaitan Chemicals and Fertilizers Ltd. reported in [2008] 307 ITR 150 (Delhi), that of the Madras High Court in CIT v. Inden Biselers reported in [1990] 181 ITR 69 (Mad) and the decisions of the Supreme Court in T. R. F. Ltd. v. CIT reported in [2010] 323 ITR 397 (SC) and in CIT v. HCL Comnet Systems and Services Ltd. reported in [2008] 305 ITR 409. The standing counsel, appearing for the Revenue, on the other hand, contended that section 115JA is a self-contained scheme of a....
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....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. (2) Every assessee, being a company, 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 (1 of 1956) ; . . . 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-. . . if any amount referred to in clauses (a) to (f) is debited to the profit and loss account, and as reduced by,- &nbs....
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....ar relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation.-For the purposes of this clause, 'net worth' shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986). (viii) the amount of profits, eligible for deduction under section 80HHC, computed under clause (a), (b) or (c) of sub-section (3) or sub-section (3A), as the case....