2001 (10) TMI 47

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ction under section 32AB of the Income-tax Act, 1961, is to be allowed at 20 per cent. of the book profit of the undertaking as a whole computed in accordance with Schedule VI of the Companies Act, and not on the business income computed as per the provisions of the Income-tax Act?" The assessment years are 1987-88 and 1988-89. The assessee, which is engaged in the business of banking, claimed the benefit of section 32AB(1) and for that purpose, it relied upon the calculation of the profits of its business, which was made in accordance with sub-section (3) of section 32AB. That sub-section, as it stood, during the relevant year, is as under: "(3) The profits of business or profession of an assessee for the purposes of sub-section (....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rence to the computation of the profit and computed in accordance with Schedule VI to the Companies Act. His view was upheld in appeal but reversed by the Tribunal on further appeal and, in our view, rightly so. What has been done by the assessee is not strictly in accordance with the requirement of the statutory provision. Section 32AB(3) nowhere refers to the computation of the income under the provisions of the Income-tax Act. No such requirement can be imported into it. The view adopted by the Assessing Officer and the appellate authority would find no support whatever from any part of section 32AB. Section 32AB provides a benefit to the assessee. The benefit so provided is an incentive to an assessee, who deposits any amount in a....