2009 (9) TMI 984

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....115JA of the Income-tax Act, 1961 (for short hereinafter referred to as 'the Act') for the purpose of computing income under section 115JA of the Act." 2. Brief facts leading to the appeal are as under:- Assessee is a company incorporated under the provisions of the Indian Companies Act, 1956 with limited liability. 3. Assessment year is 1999-2000. Dispute relates to the computation of book profits of the assessee for the previous year relevant to the assessment year, required to be arrived at, in terms of the provisions of section 115JA of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). 4. This section has enabled the revenue to levy tax on a minimum, total income of a Company, equal to 30 per cent....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he trend and opined that the assessee was right in contending that the amount was not covered by clause (c). In the further appeal to the Income-tax Appellate Tribunal, the Tribunal also having affirmed the view taken by the Commissioner of appeals, the revenue is in further appeal before us. 9. While submission of Smt. Vani, learned counsel appearing for the assessee is that the matter is squarely covered by the judgment of the Supreme Court in the case of CIT v. HCL Comnet Systems and Services Ltd. [2008] 305 ITR 409 of the year 2008 and the matter possibly could have been disposed of following and applying the law as declared by the Supreme Court to this case, the revenue having sought for some accommodation, in contemplation of some fu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts, the amended provision does apply to the case. 11. Sri Shankar, learned counsel who was requested by us and who was permitted to make submissions on the possibilities of understanding the scope of the amended provision has assisted the court and has made the following submissions. 12. Sri Shankar, would submit that the legislative insertion in the form of clause (g) to the Explanation will be attracted only to fact situations where a provision is as such made for providing for diminution in the value of any asset of the Company and a provision is where it is not actually done, but in contemplation or in the wake of future possibility to effectuate that. 13. Submission is that if it is a case of debt, perhaps as in the present case and....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eafter in this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such 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." "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:- (a) to (f) ** ** ** (g) the amount or amounts set aside as provision for diminution in the value of any asset." 16. It is therefore, we answer the question accordingly and allow this appeal by setting aside the order of the Tribunal and ho....