TaxTMI 
TaxTMI 
2012 (9) TMI 64
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....on of the Assessing Officer is also incorrect as Assessing Officer has not applied provisions of section 10B(6) as per which the provisions of section 32(2) are not relevant for the purpose of computation of benefit u/s. 10B of the IT Act, 1961. iv) On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (A) has erred by directing the Assessing Officer to apply the provision of section 10B(6) and that if depreciation pertains to A.Y. ending a April, 2001 then such depreciation will not be part of current year depreciation and thus almost restore back the issue to the Assessing Officer which is not permissible as per law. v) The appellant craves to lave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 3. In this case Assessing Officer observed that vide questionnaire dated 9.11.2009, assessee was required to explain as to why the amount of brought forward depreciation was not be set off along with the current years depreciation against the allowable business profits before allowing exemption u/s. 10B and why the amount of brought forward depreciation may not be disallowed to be carried forward as per provisio....
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....p; Book profit Rs. 2,05,10,176/- Tax due @ 7.5% thereof Rs. 15,38,263/- Add: S.C. Rs. 38,456/- Total tax liability Rs. 15,76,719/- 4. Against the above order the assessee was in appeal before the Ld. Commissioner of Income Tax (A). Ld. Commissioner of Income Tax (A) noted that in this case Assessing Officer observed that income u/s. 115JB has not been correctly computed as the exemption u/s. 10B has not been correctly worked out and adjusted. Ld. Commissioner of Income Tax (A) further noted that Assessing Officer has further observed that for the purpose of working out exemption u/s. 10B, unabsorbed depreciation of earlier years has to be adjusted first and only if there is any resultant income, same is to be computed u/s. 10B for the purpose of assessment under the normal provisions or for the purpose of computation of income u/s. 115JB. 4.1 As regard the issue of jurisdiction in this case Ld. Commissioner of Income Tax (A) noted that there was no failure or omission on the part of the assessee in disclosing of the relevant facts for computation of income under the provisions of the Act. Ld. Commissioner of Income Tax (A) further noted that only b....
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.... CIT Vs. Isthmain Steamshiplines 201 ITR 572 and CIT Vs. Jaipuria Claymines Ltd. 59 ITR 555. These judgments are relevant to normal provisions of the act and has no bearing to the provisions of sec. 10(B) as referred to and clarified above. It was submitted that Section 10(B) is an independent code and it has been intended to provide incentive to the tax payers who are engaged in the business of exports and as such provisions have to be applied so as to advance spirit and objective of the section. It was further submitted that these are incentive provisions and these provisions have to be considered in a liberal manner so as to advance the objection and spirit of the provisions and not to deprive the assessee of the statutory benefit on technical ground. Reference was made to decision of Supreme Court in the case of Bajaj Tempo Ltd. 196 ITR 189. BAJAJ TEMPO LTD. Vs. CIT 196 ITR 189 (SC) A provision in a taxing statute granting incentives for promoting growth and development should be construed liberally; and since a provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the provis....
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....nal decision in assessee's own case for the preceding assessment year, which read as under:- "5. We have heard both the parties and gone through the facts of the case as also the aforesaid decision of Hon'ble Kerala High Court relied upon by the Ld. AR. Indisputably, determination book profits u/s 115JB of the Act does not form part of the assessment order dated 31st March, 2005. It appears that the assessee in their computation u/s 115JB of the Act, reduced the book profits by an amount of Rs. 2,83,97,520/- on account of deduction u/s 10B of the Act while under the normal provisions such benefit worked out to Rs. 140,34,521/- due to difference in rates of depreciation in accordance with IT Rules,1962 vis-a-vis provided in the Companies Act, 1956. The AO, in the reassessment proceedings, validity of which is not in question before us nor the ld. CIT(A) adjudicated the legal ground, restricted the deduction u/s 10B of the Act to an amount of Rs. 1,40,34,521/- while determining book profits u/s 115JB of the Act. The detailed working of this amount is not evident from the impugned order nor has been placed before us. However, it is submitted that variation in deduction u/s 10B of the....
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....ay a 'minimum corporate tax' on the profits declared by it in its own accounts. Under this new provision, a company will pay tax on at least 30 per cent. of its book profits. In other words, a domestic widely held company will pay tax of at least 15 per cent. of its book profit. This measure will yield a revenue gain of approximately Rs. 75 crores". Section 115J of the Act broadly makes applicable to the assertible depreciation at the rates prescribed in Schedule VI. Thus, this provision is incorporated in the Act. Section 355 of the Companies Act cannot be made applicable in such cases. We are of the view that depreciation has to be calculated as stated in section 350 of the Companies Act." 5.1 Even otherwise, in view of decision of the Hon'ble Apex Court in Apollo Tyres Ltd. Vs. CIT, 255 ITR 273, the AO, while assessing a company for income-tax under section 115J of the Act, cannot question the correctness of the profit and loss account prepared by the assessee-company and certified by the statutory auditors of the company as having been prepared in accordance with the requirements of Parts II and III of Schedule VI to the Companies Act .In terms of the extant provisions of sec.....
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....ted for the purpose of preparing such accounts including profit and loss account and laid before the company at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956. 11. Considering the above, Tribunal held that in view of the specific provisions contained in sub-section (2) of sec. 115JB of the Act, especially when the Ld. Commissioner of Income Tax (A) merely followed the aforesaid decision in accepting the claim of the assessee while the Revenue have not brought to the notice any contrary decision nor any other material, the tribunal did not take a different view in the matter and hence, the tribunal declined to interfere with the order of the Ld. Commissioner of Income Tax (A). 11.1 We further note that in the case laws referred by the Ld. Departmental Representative in the case of C.I.T. vs. Himatasingike Seide Ltd. [2006] 286 ITR 0255 (Karnataka High Court) following was held:- "Held, that section 10B cannot be read in isolation of other provisions. It is only an exemption provision. It may be true that even after taking into consideration the unabsorbed depreciation, the assessee may get exemption but none the less it coul....