TaxTMI 
TaxTMI 
2019 (9) TMI 192
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....g financial company deriving its income from investment in shares and mutual funds and also one of the holding companies of Dabur Group of Companies. During the financial year 2008-09, they have sold the share of Dabur Pharma Ltd. for a sale consideration of Rs. 76,90,62,303/- and offer the same as long term capital gain @ 10% of market transaction. They have filed their return of income on 29.9.2009 for the Asstt. Year 2009-10 declaring a gross total income of Rs. 29,88,08,201/- and a book loss of Rs. 10,43,99,519/- u/s 115JB of the Income-tax Act, 1961 ('the Act'). Learned AO computed the income of the assessee at Rs. 67,14,57,651/- u/s 115JB of the Act which is more than tax on regular income which was assessed at Rs. 35,72,54,455/-. In ....
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.... Mills Ltd. vs ACIY (1993) 199 ITR (AT) 164, the assessee is not required to credit the profit realized on a capital assets to the profit and loss account and such realized amount has to be credited to the capital reserve account of Part II and III of Schedule VI of the Companies Act because it is not a regular income but only a deemed income u/s 45 of the Incometax Act and not under the Companies Act. Learned AR submitted that the decision of Sutluj Cotton (supra) has been noticed by number of other judgments subsequently and in the case of CIT vs Akshay Textiles and Trading P. Ltd., 304 ITR 4012 (Bom) and in the case of CIT vs Sain Processing & Weaving Mills P. Ltd., 325 ITR 565(Del), the Hon'ble Delhi High Court while noticing the decisi....
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....ssessee had not disclosed such capital gains at all. The issue in this matter revolves around the question as to whether, while preparing the profit and loss account in terms of Part II and III of Schedule VI of Companies Act, the capital gain accrued on account of sale of capital assets should have been credited to the profit and loss account for the purpose of computation u/s 115JB of the Act. 7. As stated above, reliance is placed on the decision of the special bench of the tribunal in the case of Sutluj Cotton Mills (supra). In that decision after considering the entire gamut of Section 115J which is in pari-materia to Section 115JB of the Act clearly held, - (i) that having regard to the pattern of the Income-tax Act, the c....
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....ing officer to disturb the profit as shown by the assessee. 8. It is, therefore, clear that whether the capital gain that had arisen on the sale of Dabar Pharma share was rightly credited by the assessee to the capital reserve account or rightly rejected by the AO on the ground that it has to be routed through profit and loss account, is a debatable issue. 9. Further, there is no dispute that the accounts of the assessee were prepared in accordance with the provisions of Part II of Schedule VI of the Companies Act and the Hon'ble Apex Court in thecase of Apollo Tyres,(supra) held in unequivocal terms that the Ld. AO while computing the income u/s 115J has only the power of examining whether the books of accounts are certified by the a....