2014 (1) TMI 711

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....made in I.T.A.No.460/H/92, for the assessment year 1989-1990: "1) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that the computation of the loss to be carried forward cannot be an extension of determination of the profit u/s 115J of the Income Tax Act and accordingly upholding the order of the CIT (A)? 2) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that since the assessment order contained only a working for determination of book profit U/s. 115J, there is no infirmity in the order of the CIT (A) declining to deal with the other grounds raised by the appellant in relation to determina....

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....he business of manufacture and sale of cement. Assessee filed its return of income disclosing 'nil' income after setting off of unabsorbed investment allowance of Rs.22,44,298/- and disclosing an income of Rs.30,56,600/- under the provisions of Section 115 J of the Income Tax Act, 1961 (in short "the Act"). The Assessing Officer while framing the assessment added back certain deductions claimed by the assessee. The Assessing Officer finally determined the income of the assessee at 'nil' after allowing the set off of investment allowance for the Assessment year 1988-1989 and 1989-1990 to the extent of Rs.51,16,367/-. In so far as the computation of book profit under Section 115J of the Act is concerned, he computed the total book profit at R....

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....ddition of Rs.2,00,000/- being provision for doubtful debts to the book profits, the Tribunal confirmed the addition relying upon the decision of the jurisdictional High Court in the case of CIT Vs. Sileman Khan Mahabub Khan 174 ITR 200 as well as the amended provisions of Section 36, which were amended with effect from 01.04.1989. 5) Sections 115J, 115J(1), 115J(1A) and 115J(2) read as under: Section 115J - Special provisions relating to certain companies: (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of generation or distribution of electricity), the total income, as computed under this Act in respect of any previo....

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.... be worked out in accordance with the Explanation to section 115J(1) and it is to be seen whether the income determined under the first process is less than 30 per cent of the book profit. Section 115J would be invoked if the income determined under the first section (1) of section 115J gives the definition of 'book profit' by incorporating the requirement of section 25 of the Companies Act in the computation of the book profit. Brought forward loss or unabsorbed depreciation whichever is less would be reduced in arriving at the book profits. Sub-section (2), however, provides that the application of this provision would not affect the carry forward of unabsorbed depreciation, unabsorbed investment allowance, business losses to the extent n....