TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1116
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....ciating the fact that though the same was done as per Reserve Bank of India guidelines, yet the same was not an allowable expenditure under Section 37(1) of the Act. For the facility of reference, facts from ITA No.18/2014 are being referred to. 2. Facts giving rise to the filing of these appeals briefly stated are that the assessee is engaged in the business of banking. In the computation of business income furnished along with the return of income for assessment year 2002-2003, the assessee claimed deduction of a sum of Rs. 11,18,42,001/- on account of write off of non convertible debentures. The assessee in the communication dated 01.02.20015 furnished for the Assessing Officer submitted that the total write off on account of non convertible debentures was a sum of Rs. 17,16,17,001/-, out of which a sum of RS.5,97,75,000/- had been written off during the previous year and charged to profit and loss account. It was claimed that the aforesaid amount has become irrecoverable and therefore, a deduction was claimed on account of bad debts under Section 36(1)(vii) of the Act. The Assessing Officer held that since the aforesaid amounts were subject matter of another assessment year, t....
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....e assessee submitted that the issue whether provisions of Section 115JB of the Act apply to banking company is no longer res integra and is covered by a division bench decision of 'BOMBAY HIGH COURT IN COMMISSIONER OF INCOME TAX-LTU VS. UNION BANK OF INDIA', ITA NO.1196/2013 DATED 16.04.2019. It is further submitted that the second substantial question of law is also covered by a division bench decision of this court in the case of 'COMMISSIONER OF INCOME TAX AND ANOTHER VS. KARNATAKA VIKAS GRAMIN BANK', (2016) 130 DTR (KAR) 26. It is also urged that Section 115JB(2) of the Act does not create any legal fiction and the second issue involved in ITA No.18/2014 no longer survives for consideration in view of instruction No.17/2008 dated 26.11.2008 issued by Central Board of Direct Taxes. It is also urged that the decision rendered in the case of SOUTHERN TECHNOLOGIES LTD has been considered by a division bench of this court in 'KARNATAKA BANK LTD. VS. ASSISTANT COMMISSIONER OF INCOME-TAX', (2013) 356 ITR 549 (KARN) and it has been held that the Reserve Bank of India directions of 1998 are only disclosure norms and have nothing to do with the computation of the total taxable income und....
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....troduction of minimum alternative tax is to levy a minimum tax on companies which are having book profits and paying dividends but are not paying any taxes. The relevant extract of Section 115JB of the Act reads as under: 2. Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956. Provided that while preparing the annual accounts including profit and loss account - (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including profit and loss account; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including profit and loss account and laid before the company at its annual general meeting in accordance with the provisions of Section 210 of the Companies Act, 1956. 8. From close scrutiny of Section 115JB(2) of the Act, it is axiomatic that every assessee being a company for the purposes of said Section prepares its profit and loss account for relevant ....
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...., the charging section and computation provisions together constitute an integrated code. When there is a case to which computation provision cannot apply at all, it is evident that such a case was not intended to fall within charging section. [SEE:'COMMISSIONER OF INCOME TAX, BANGALORE VS. B.C.SHRINIVASA SETTY', 1981 VOL 128 ITR 294]. The machinery provisions provided in Sub- Section (2) of Section 115JB of the Act would be rendered wholly unworkable in case of a Banking company. It is also pertinent to mention here that the Companies Act, 1956 has excluded insurance, banking companies or the companies engaged in the generation or supply of electricity from the purview of Section 211(1) of the Companies Act, 1956 and resultantly from the purview of Section 115JB of the Act. 11. Admittedly, the provisions of Section 115JB of the Act have been amended with effect from 01.04.2013, the memorandum explaining the provisions of Finance Bill, 2012 while explaining the amendments to Section 115JB of the Act, notes that in cases of certain companies such as insurance, banking and electricity companies, they are allowed to prepare the profit and loss account in accordance with the Sections ....