2014 (9) TMI 1173

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....f addition made to the book profit on account of profit made on sale of land amounting to Rs. 2,84,84,000/- which was not credited to the profit and loss account. 3. We have considered the rival contentions and found that during the year under consideration the assessee has earned capital gain on sale of land. As per the provisions of section 45, no capital gain tax was payable. Since the proceeds of the land are not available for the distribution of dividend, the same was not credited to the P&L account but taken directly to the capital reserve account. The P&L account was prepared by the company in accordance with the provisions of parts II & III of schedule VI to the Companies Act, 1956 and is audited under the Companies Act. 4. Wh....

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.... VI of the Companies Act and, therefore, disallowed the arrears of depreciation which had been upheld up to the level of the High Court. The Hon'ble Supreme Court observed that Section 115J provisions of which were similar to those of 115 JB was introduced in the Income tax Act with a deeming provision which made Companies liable to pay tax at least 30% of book profit as shown in its own accounts. For the said purpose, the section 115J made income reflected in the company's books of account, the deemed income for the purpose of assessing the tax. The Hon'ble Supreme Court further observed that the use of the words "in accordance with the provisions of part-II and Part-III of Schedule- VI of the Companies Act" was made for the li....

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....wering the Assessing Officer to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, the Assessing Officer has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, which obligate the company to maintain its accounts in a manner provided by that Act and the same to be scrutinized and certified by statutory auditors and approved by the company in general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and be satisfied that the accounts of r13 company are maintained in accordance with the requirements of the Companies Act. Sub-section (1A) of Section 115J does not empower t....