TaxTMI 
TaxTMI 
2011 (12) TMI 623
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the CIT(A) has erred that insufficient reasons were given for the issue of notice u/s 148. 3 On the facts and circumstances of the case, the CIT(A) has erred that b/f depreciation along with the current year depreciation was liable to be excluded for working out the eligible profit for computing the exemption u/s 10B to be reduced from the book profit. 4 The appellant may be allowed to alter, amend, modify, add or any grounds of appeal during the appellate proceedings." 2. Facts, in brief, as per relevant orders are that return declaring nil income filed on 25.11.2003 by the assessee after being processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....laim of deduction of ``143.63 lacs u/s 10B of the Act while determining book profits u/s 115JB of the Act. 3. On appeal, the learned CIT(A), without going into the legality of notice issued u/s 148 of the Act ,concluded that there was no mistake in payment of tax liability u/s 115JB of the Act . The findings of the ld. CIT(A) read as under:- "The reasons for difference in computation of exemption u/s 10B for the purpose of regular provisions and under MAT is because of claim of depreciation. Prescribed rate of depreciation under I.T. Rules and under Companies Act are different. The balance sheet is prepared as per schedule-VI to the Companies Act 1956 after taking into consideration stipulated rate of depreciation as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he concept of tax liability u/s 15JB is well laid down in the scheme of the Act itself. And also supported from legal decisions referred to above T here is thus no mistake in payment of tax liability u/s 115JB by the appellant. In view of above directions, it is not necessary to adjudicate the legal ground. The ground regarding charge of interest is of consequential nature and Assessing Officer may give relief as per law." 4. The Revenue is now in appeal before us against the aforesaid findings of ld. CIT(A). The ld. DR supported the findings of the AO while the learned AR on behalf of the assessee relied upon the impugned order in the light of decision of Hon'ble Kerala High Court in CIT vs. Dynamic Orthopedics Pvt. Ltd. ,257 I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he book profit estimate under section 115J has to be made on the basis of depreciation calculated in accordance with Schedule VI to the Companies Act,1956 and not as per the provisions of the Act. The findings of the Hon'ble High Court read as under: "Sub-section (1A) of the Act says that every assessee, being a company, shall, for the purpose 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. The argument of learned counsel for the assessee is that the respondent being a private company, the preparation of its profit and loss account for the relevant previous year in accordance with the provisions of Part II ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany 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 u....