TaxTMI 
TaxTMI 
2018 (7) TMI 2082
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....y the total income was computed at Rs. 4,96,803/-. However, the AO computed the book profit under Section 115JB of the Act at Rs. 2062.19 lakhs. Since the book profit was more than the total income computed under normal provisions of the Act, the AO treated the book profit as total income in terms of sec 115JB of the Act. While computing book profit, the assessee did not allow deduction u/s 80IB(10) of the Act. 4. Before the CIT(A), the assessee contended that the AO should have allowed deduction under Section 80IB(10) of the Act while computing book profit under Section 115JB of the Act. The learned CIT(A) noticed that identical issue was considered by the Hon'ble Karnataka High Court in the case of Sankhla Polymers P. Ltd. vs. ITO 257 CTR 185 wherein it was held that deduction available under Section 80IB of the Act while computing the total income under the normal provisions of the Act cannot be allowed to be deducted while computing book profit under Section 115JB of the Act. The learned CIT(A) also noticed that identical view has been expressed by the Ahmedabad Bench of the Tribunal in the case of Ganesh Housing Corporation Ltd. vs. ACIT (2009) 32 SOT 207. Accordingly th....
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....ons of Section 115JB should not be applied to the assessee. He further submitted the exemption given to the company under Section 80IB(10) of the Act shall represent the income which is not taxable and hence the same should be deducted while computing book profit. In this regard the learned A.R. took support of the decision rendered by the Hon'ble Supreme Court in the case of CIT vs. D.P. Sandhu Brothers 273 ITR 1 wherein it was held that receipts which are not taxable cannot be brought to tax net under any other Section. Accordingly the learned A.R. submitted that the assessee should be allowed deduction under Section 80IB(10) of the Act while computing book profit. He submitted that the Mumbai Bench of the Tribunal has considered identical issue in the case of Neha Home Builders P. Ltd. vs. CIT (2018) NEHA HOME BUILDERS and held that the assessee was entitled to deduction under Section 80IB(10) of the Act while computing book profit under Section 115JB of the Act. 8. On the contrary, the learned D.R. submitted the provisions of Section 115JB of the Act is applicable to all companies mentioned therein and hence the contentions of the learned A.R. that it would cover only "ce....
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....ka High Court in the case of Sankhla Polymers P. Ltd. (supra) and he Hon'ble High Court has held that provisions of Section 115JB would apply to the assessee who is claiming deduction under Section 80IB of the Act and deduction under Section 80IB(10) of the Act cannot be allowed while computing book profit under Section 115JB of the Act. The learned D.R. further submitted that an identical view has been expressed by the Ahmedabad Bench of the Tribunal in the case of Ganesh Housing Corporation Ltd. (supra). The learned D.R. further submitted that the decision in the case of D.P. Sandhu Brothers (supra) was rendered by the Hon'ble Supreme Court in the context of computation of capital gains and hence the observations made therein cannot be taken support by the assessee while computing book profit under Section 115JB of the Act. 11. We have heard the parties on this issue and perused the record. As submitted by the learned D.R., provisions of Section 115JB prescribe the methodology to collect minimum amount of tax and hence the tax so collected was called Minimum Alternate Tax. This provision is successor to sec. 115JA and sec. 115J, which were brought into the statute by th....
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....he Act is taken as total income and tax shall be levied thereon as per the provisions of sec.115JB of the Act. It is pertinent to note that the methodology to compute "Book Profit" is prescribed in sec. 115JB of the Act. In our view, the provisions of sec.115JB(5) protects the methodology of computing "Book Profit" prescribed in sec. 115JB of the Act and hence the it begins with the expression "save as otherwise provided in this section", i.e., except for the provisions specifically provided in sec. 115JB of the Act, all other provisions of the Act shall apply. In our view, this is the proper interpretation of sec. 115JB(5) of the Act. We notice that sec.115JB(5) of the Act was interpreted by the Hon'ble Supreme Court in the case of Rolta India Ltd.(supra) in the context of charging of interest u/s 234B of the Act. Admittedly provisions of Section 115JB does not provide for charging interest corresponding to sec. 234B and hence the Hon'ble Supreme Court held that the provisions of sec. 234B shall apply to the tax payable on the Book profit computed u/s 115JB of the Act, since sec. 115JB(5) states that "all other provisions the Act shall apply". There was no occasion for the Hon....
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....stipulated amount and a charge is created for making the difference i.e. the object of the legislation is to ensure a minimum tax of 7½% on the book profit as ascertained under Section 115JB is levied and collected from the companies whose payment of tax always without the application of this provision falls short of this amount of tax. 27. Though Sri Shankar, learned counsel for the appellant has called in aid not only the budget speech but also the circular issued by the board and the principles of promissory estoppel and legitimate expectation etc., we are afraid none of these principles are attracted for the simple reason that a budget speech being only an introductory to the bill in the Parliament and that in itself is not an end. 28. Though many decisions are roped in for interpreting this, we find there is no scope for interpretation in the present situation, as the provision of the statute should be given effect to, as it occurs and if there is only any ambiguity in understanding the statute then only the tool of interpretation should be called in aid. We do not find any competing or derogatory provision in Section 115JB vis-à-vis Section 80-IB of the Ac....
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....l for the appellant-assessee on this aspect of the matter, in the present situation. 32. In so far as the reliance placed on the judgment of this court in the case of M/s United Breweries Ltd [supra] is concerned, while that was with reference to the provisions of Section 115JA and we are now examining the liability under Section 115JB of the Act. The scheme of charging under Section 115JB being totally different and not with reference to general rate, but with reference to a specified rate as indicated in Section 115JB itself i.e. 7½% of deemed income for the purpose of Section 115JB, we are afraid the judgment will not advance the case of the assessee in the present situation. 33. A budgetary speech while will have some significance for understanding a provision if there is any ambiguity, in the wake of clear language of the Section 115JB, in the first instance there is no ambiguity, in the second instance, the ambiguity sought to be introduced on certain premise which is not apparent and is only on a limited reading of the budget speech, at any rate a budget speech in itself cannot regulate or control the statutory provision, more so a charging section in a revenue ....
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....of the Act, are able to show either a nil taxable income or much reduced taxable income. Concession given under Section 80-IB is also one such and therefore no exception can be taken. Only in respect of the availability of a concession under Section 80-IB and to make it immune from the applicability of the provisions of Section 115JB of the Act. Both provisions operate in their own respective spheres and have to be given effect. 37. Secondly and more importantly, no provision of a statute can be so interpreted as to render it unconstitutional. If the argument of Sri Shankar, learned counsel for the appellant, is to be accepted, then it will result in a discrimination against such assessee- companies who have to pay tax under Section 115JB of the Act, but have no concession available under Section 80-IB, whereas the tax liability of the person under Section 115JB of the Act, who can claim concession under Section 80-IBof the Act gets reduced for the purpose of Section 115JB of the Act. It is, therefore, to avoid Section 115JB being rendered discriminatory and unconstitutional being violative of Article 14 of the Constitution of India, the contention of Sri Shankar for reading dow....
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....tion 210 of the Companies Act, 1956 and as has been arrived at by following the accounting policies, accounting standards and the methods and rates adopted for calculating the depreciation as has been adopted for preparing the profit and loss account as laid before the Annual General Meeting. Thus, the net profit as shown in the profit and loss account laid before the Annual General Meeting will be the book profit but this book profit is subject to the adjustment as laid down under Explanation 1, clauses (a) to (h ) and clauses (i) to ( viii). Clauses (iv), (v) and (vi ) no doubt state that the profit has to be reduced by the amount of profit eligible for deduction under section 80HHC, under section 80HHE and under section 80HHF, respectively. Clauses (i) to (viii) under Explanation 1 nowhere provides for the reduction of the deduction allowable under section 80-IB out of the book profit. Sub-section (3) states that the provisions of section 115JB(1) will not affect the determination of the amounts in relation to the relevant previous years to be carried forward to the subsequent year or years under section 32(2) or 32A(3) or 72(1) or 73 or 74A(3). Section 115JB(4) makes it mandato....
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....', 'Income from house property', Profits and gains of business or profession, 'Capital gains' and 'Income from other sources'. After computing the income under the different heads as per the provisions of sections 14 to 59, there are certain income of other persons which are to be included in assessee's total income. They are being dealt with under sections 60 to 65 of the Act. Section 66 lays down that in computing the total income of the assessee there shall be included all the income on which no income-tax is payable under Chapter VII. Sections 67 to 79 falling under Chapter VII deal with the aggregation of the income and set-off and carry-forward of the losses while computing the total income of the assessee. However, Chapter VI-A deals with various provisions relating to the deductions to be made in computing the total income of the assessee. These deductions are to be made out of the gross total income. Gross total income is defined under section 80B(5) to mean the total income computed in accordance with the provisions of the Income-tax Act before making any deduction under Chapter VIA. The deduction under section 80-IB is allowable to the assessee on the profits of the elig....
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....y the Coordinate bench in the case of Neha Home Builders (P) Ltd vs. CIT (2018)(92 taxmann.com 102), wherein it was held that the assessee is entitled for deduction u/s 80IB(10) of the Act while computing book profit u/s 115JB of the Act. On a careful perusal of the order passed in the case of Neha Home Builders (P) Ltd (supra), we notice that the same is related to the appeal preferred against the revision order passed by Ld CIT u/s 263 of the Act. In the above said case, the AO had accepted the claim of the assessee for granting deduction u/s 80IB(10) of the Act from the net profit, while computing "book profit" u/s 115JB of the Act. The Ld CIT followed the decision rendered by Hon'ble Karnataka High Court and Ahmedabad bench of Tribunal (both the cases referred above) and held that the assessee cannot claim deduction u/s 80IB(10) of the Act while computing book profit. The Tribunal took the view that the AO has taken a possible view and accordingly set aside the revision order. The Tribunal has taken the view that the decision rendered by non-jurisdictional High Court cannot trigger revision proceedings u/s 263 of the Act. Since the decision has been rendered by the Tribunal in ....