2015 (10) TMI 397

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....d the Assessing Officer passed an assessment order under Section 143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act) after making certain additions and disallowances under various heads. Being aggrieved, the assessee filed an appeal, which was partly allowed. The matter was taken to the Tribunal. The Tribunal allowed the appeal against which the Department has filed the present appeal. The assessee claimed depreciation after reevaluating its fixed assets. The Assessing Officer found that as per Section 115J of the Act, net profit shown in the profit & loss account was in accordance with the provisions of part II and III of Schedule VI to the Companies Act, 1956. The Assessing Officer however, was of the opinioin that t....

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....ofit 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. The Supreme Court held that the Assessing Officer was bound to rely upon the authentic statement of accounts of the company and had to accept the authenticity of the accounts with reference to the provisions of the Companies Act which obligates the company to maintain its account in a manner provided by the Companies Act. The Supreme Court held that the Assessing Officer while computing the income under Section 115J had only the power of examining whether the books of account were certified by the authorities under....

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....ot find any illegality or infirmity in the order of the Tribunal." In the light of the aforesaid, we find from a perusal of the assessment order that the net profit shown in the profit and loss account of the company was prepared in accordance with Parts II and III of Schedule VI to the Companies Act. Once this finding has been given, the Assessing Officer could not go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J of the Act. We are of the opinion that the provision of Section 115J does not empower the Assessing Officer to embark upon a fresh inquiry in regard to the entries made in the books of account of the company. The Supreme Court has categorically held i....