AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1442
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.... in characterising both capital receipts and revenue receipts in a like manner for the computation of book profits under section 115JB of the Income-tax Act, 1961 ? (b) Whether the Tribunal was right in confirming that the computed book profit was to include amounts that were excluded under section 2(24) of the Income-tax Act and hence holding that the minimum alternate tax would enlarge the scope of the "income" under the Income-tax Act, 1961 ? (c) Whether the Tribunal was right in declining to accept the documents requested by the Assessing Officer on the ground that the production of documents amounts to production of additional evidence ?" 3. However, in our considered view, the only question which may be required to be considered ....
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.... assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals). It appears that the Commissioner of Income-tax (Appeals) concurred with the view of the Assessing Officer by relying upon the decision of the apex court in the case of Apollo Tyres Ltd. v. CIT reported in [2002] 255 ITR 273 (SC) and found that book profits arrived at as per the provisions of Income-tax Act cannot be tinkered with. The matter was further carried in an appeal before the Tribunal and the Tribunal in the conclusion, at paragraph 7, observed thus : "7. We have considered the rival submissions as well as the relevant material on record. The amount of Rs. 43 lakhs pertains to remission of liability under one-time settlement of outstanding loa....
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....the notes to accounts would not require any change in the profit and loss account already prepared as per Schedule VI to the Companies Act. The decisions relied upon by the assessee are applicable on the facts and circumstances where if an item of income or expenditure which is required to be disclosed in the profit and loss account pre pared as per provisions of Schedule VI to the Companies Act but instead of disclosing the said item in the profit and loss account, it was disclosed in the notes to the accounts, then such item of income or expenditure will be treated as part of the profit and loss account for the purpose of computing book profits under section 115JB. Once profit and loss account is admittedly prepared as per Schedule VI to ....
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....[2002] 9 SCC 1 wherein at paragraphs 7 and 8 it was observed thus (page 279 of 255 ITR) : "The above speech shows that the Income-tax authorities were unable to bring certain companies within the net of Income-tax because these companies were adjusting their accounts in such a manner as to attract no tax or very little tax. It is with a view to bring such of these companies within the tax net that section 115J was introduced in the Income-tax Act with a deeming provision which makes the company liable to pay tax on at least 30 per cent. of its book profits as shown in its own account. For the said purpose, section 115J makes the income reflected in the companies' books of account as the deemed income for the purpose of assessing the t....
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....A) 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 said sub-section, as a matter of fact, mandates the company to maintain its account in accordance with the requirements of the Companies Act which mandate, according to us, is bodily lifted from the Companies Act into the Income-tax Act for the limited purpose of making the said account so maintained as a basis for computing the company's income for levy of Income-tax. Beyond that, we do not think that the said sub-section empowers the authority under the Income-tax Act to probe into the accounts accepted by the authorities under the Companies Act. If the statute mandates that....
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.... of account certified by the authorities under the Companies Act for the purpose of computing income is to be accepted as per section 115JB of the Act and the increase or reduction is permissible only to the extent provided under Explanation to the said section. To put it differently, there is no jurisdiction for the Assessing Officer to go beyond the profit shown in the "profit and loss account" except to the extent provided in the Explanation to section 115JB of the Act. 8. Learned counsel appearing for the appellant attempted to contend that while giving the treatment to profit and loss account, one has to see the taxable liability of the income. According to him, capital receipts cannot be termed as "profit" for the purpose of Income-t....