TaxTMI 
TaxTMI 
2021 (8) TMI 442
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....s Court on the following substantial questions of law: a) Whether the Tribunal was justified in holding that lease equalization charges provided is a provision for diminution of value of asset to rope in clause (g) of Explanation to Section 115JA of the Act to increase the book profit for the purpose of determination of tax under the said section? b) Whether the Tribunal was justified in ignoring the direction of this Hon'ble High Court in the Appellant's own case to follow the ratio of the Supreme Court in the case of Apollo Tyres Ltd Vs. CIT (2002) 255 ITR 273 while setting aside the assessment originally made and proceeded to hold the provisions of clause (g) of Explanation to Section 115JA(2) of the Act would apply to....
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.... assessee is entitled to make such a bifurcation and there is no illegality in the same. It is further submitted that lease equalization charges have to be taxed to the extent of real income and the method of calculating the income has to be followed by applying guidance note of ICAI. It is also submitted that the Tribunal has cited the first substantial question of law mentioned in the order dated 02.05.2017 passed in ITA Nos.1025-27/2016 and relying on the answer to substantial question of law No.2. In support of aforesaid submission, reliance has been placed on the decisions of High Court of Delhi in 'COMMISSIONER OF INCOME-TAX Vs. M/s.MGF INDIA LTD.' DATED 21.02.2018 PASSED IN ITA NO.378/2004 and 'PRAKASH LEASING LTD. Vs. DE....
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....total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent. of such book profit. (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 (1 of 1956): Provided that while preparing profit and loss account, the depreciation shall be calculated on the same method and rates which have been adopted for calculating the depreciation for the purpose of preparing the profit and loss account laid before the company at its annual general meeting in accordance with the provisions of section....
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....b-section (2) of Section 115JA of the Act has been inserted by Finance Act, 2009 w.e.f. 01.04.1998. The aforesaid provision applies to companies. It provides that if total income of the company as computed under the provisions of the Act is less than 30% of the book profit, the total income of such assessee is chargeable to tax for the relevant previous year shall be deemed to be an amount equal to 30% of the such book profit. The explanation to sub-section (2) provides that for the purposes of this section book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2) as increased by the amounts mentioned in clauses (a) to (g). 6. In the instant case, the assessee mad....