TaxTMI 
TaxTMI 
2021 (12) TMI 588
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....ct, was required to be reduced from the net profit for the purpose of computation of book profit. 3. The Id AO also failed to correctly appreciate the judgement of the Apex Court, in the case of JCIT Vs Rolta India Ltd [2011] 330 ITR 470 (SC), wherein it has been clearly held that all other provisions of the Act, shall apply to MAT company, in view of the provisions of sections 115JA(4) and 115JB(5) of the Act. 4. The Id CIT(A) also failed to appreciate that even as per Circular No.13 of 2001, dt.9.11.2001, it has been clearly pointed out that in view of section 115JB(5), all the provisions of the Act, including the provision relating to charge, definitions, recoveries, payment, assessment, etc, would apply in respect of the provisions of section 115JB of the Act. B. Regarding charge of interest under sections 234B and 234C 5. The CFT(A) erred in confirming the order of the AO, levying interest under sections 234B and 234C of the Act, to the extent of Rs,2,72,19,415/- and Rs. 52,28,525/-, respectively. 6. The Id CIT(A) failed to appreciate the fact that during the financial year (FY) 2010-11, relevant to AY 2011-12, the aforesaid judgeme....
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....5JB is very clear that where in the case of an assessee being a company, the income tax payable on total income as computed under this Act in respect of any previous year relevant to assessment year is less than 15% of its book profit, such "book profit" shall be deemed to be total income of the assessee and the tax payable by such assessee on such total income shall be the amount of income tax @15%. Sub-Section 2 of Section 115JB provides that every assessee, being a Company, shall, for the purpose of section 115JB, prepares its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and HI of Schedule VI to the Companies Act 1956. Thus, it is very obvious that book profit has to be ascertained as per the Companies Act and thereafter certain modification is to be made as per explanation I to this Section. Thus, it is very obvious that taxation u/s.115JB is as per the book profit. The accounts of the appellant shows the book profit of Rs. 51,97,40,207/-, hence same is to be taxed u/s.115JB. Assessing Officer has rightly done so. Here, it is relevant to mention that there is no dispute regarding such book profit. The only contention of th....
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....ontext. Similarly, the ratio of Sutlaj Cotton Mills Ltd. vs. ACIT 45 ITD 22 (Cal) (SB) is having different context and set of facts. In that case book profit was not to be increased by capital gains exempt u/s.54E. Similarly, the decision of Hon'ble Supreme Court in the case of CIT vs. D.P. Sandhu Brothers 273 ITR 1 (SC) is not applicable to the facts of the case. Further, the decision of the Hon'ble Supreme Court in the case of JCIT vs. Rolta India Ltd. (2011) 330 ITR 470 (SC), is in respect of charge of interest u/s.234B and 234C and Hon'ble Supreme Court has held that interest under these sections shall be payable on failure to pay advance tax u/s. 115JB Thus, these case laws does not help appellant to presume that because of subsection (5) of Section 115JB, it is not liable for tax on book profit. 3.5 Thus, in the background of above discussion, applicability of law and non-relevance of various case laws relied upon by the Ld. A.R., I reach to the conclusion that appellant is liable for tax u/s.115JB on its books profit which is of Rs. 51,97,40,207/-, hence, the assessment so made by the Assessing Officer by computing book profit is sustained." 6. Agains....
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.... 158 BH provides for application of the other provisions of the Act. It reads: "Save as otherwise provided in this Chapter, all the other provisions of this Act shall apply to assessment made under this Chapter." This is an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment." 8. Further it has been submitted that Hon'ble Apex Court in the case of Rolta India Ltd. [2011 (1) TMI 5] had occasion to interpret the same phrase like 115JB(5) and held it to be enabling provision, which makes all the provisions of the Act, save as otherwise provided applicable. In respect of section 115JB(5) thus captures the claim u/s. 80IB(10) as nothing otherwise is provided u/s. 115JB with respect to claim u/s. 80IB. Further it has been claimed that the decision of Hon'ble Supreme Court in the case of Apollo Tyres Ltd. (122 Taxman 562) and Hon'ble Bombay High Court decision in Veekaylal Investment Co.(P) Ltd. [249 ITR 597) are not applicable to the facts of the present case. It has been submitted that the above decisions in the context of sub-section 115J and did not have any provisions corresponding t....
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.... prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of Schedule III to the Companies Act, 2013 (18 of 2013); or (b) being a company, to which the second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013) is applicable, shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of the Act governing such company: Provided that while preparing the annual accounts including statement of profit and loss,- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (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 statement of profit and loss and laid before the company at its annual general meeting in accordance with the provisions of section 129 of the Companies Act, 2013 (18 of 2013) : Provided further that where the company has adopted or adopts the financial year under the Com....
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....capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by the trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47; or (fd) the amount or amounts of expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF; or (g) the amount of depreciation, (h) the amount of deferred tax and the provision therefor, (i) the amount or amounts set aside as provision for diminution in the value of any asset, (j) the amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such asset, (k) the amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through statement of profit and ....
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....rdance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or (iie) the amount representing,- (A) notional gain on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47; or (B) notional gain resulting from any change in carrying amount of said units; or (C) gain on transfer of units referred to in clause (xvii) of section 47, if any, credited to the statement of profit and loss; or (iif) the amount of loss on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through statement of profit and loss, as the case may be; or (iig) the amount of income by way of royalty in respect of patent chargeable to tax under section 115BBF; or [(iih) the aggregate amount of unabsorbed depreciation ....
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....ought forward or unabsorbed depreciation is nil; or (iv) to (vi) [***] (vii) the amount of profits of sick industrial company for the assessment year commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation.-For the purposes of this clause, "net worth" shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986); or (viii) the amount of deferred tax, if any such amount is credited to the statement of profit and loss. Explanation 2.-For the purposes of clause (a) of Explanation 1, the amount of incometax shall include- (i) any tax on distributed profits under section 115-O or on distributed income under section 115R; (ii) any interest charged under this Act; (iii) surcharge, if a....
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....(42 of 1956). (2A) For a company whose financial statements are drawn up in compliance to the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015, the book profit as computed in accordance with Explanation 1 to sub-section (2) shall be further- (a) increased by all amounts credited to other comprehensive income in the statement of profit and loss under the head "Items that will not be re-classified to profit or loss"; (b) decreased by all amounts debited to other comprehensive income in the statement of profit and loss under the head "Items that will not be re-classified to profit or loss"; (c) increased by amounts or aggregate of the amounts debited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standards 10; (d) decreased by all amounts or aggregate of the amounts credited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standards 10: Provided that nothing co....
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....on.-For the purposes of this sub-section, the expression- (i) "year of convergence" means the previous year within which the convergence date falls; (ii) "convergence date" means the first day of the first Indian Accounting Standards reporting period as defined in the Indian Accounting Standards 101; (iii) "transition amount" means the amount or the aggregate of the amounts adjusted in the other equity (excluding capital reserve and securities premium reserve) on the convergence date but not including the following:- (A) amount or aggregate of the amounts adjusted in the other comprehensive income on the convergence date which shall be subsequently re-classified to the profit or loss; (B) revaluation surplus for assets in accordance with the Indian Accounting Standards 16 and Indian Accounting Standards 38 adjusted on the convergence date; (C) gains or losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with the Indian Accounting Standards 109 adjusted on the convergence date; (D) adjustments relating to items of property, plant and equipment and intang....
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....ion shall cease to have effect in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012. (7) Notwithstanding anything contained in sub-section (1), where the assessee referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have the effect as if for the words "eighteen and one-half per cent" wherever occurring in that sub-section, the words "nine per cent" had been substituted. Explanation.-For the purposes of this sub-section,- (a) "International Financial Services Centre" shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005); (b) "unit" means a unit established in an International Financial Services Centre; (c) "convertible foreign exchange" means a foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder. 11. A readin....
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....of other provisions of this Act. Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to assessment made under this Chapter." Chapter XIV-B only lays down special procedure for assessment but thereby the effect and purport for which the assessment of income tax is done does not stand obliterated." 13. On the above notings Hon'ble Apex Court held that section 127 would apply. As noted above in the present case section 115JB by way of Explanation(1) itself provides the adjustment that can be made to book profit and section 115JB Explanation (5) saves the same. 14. We further note that the assessee has quoted following from Hon'ble Supreme Court decision in the case of Apollo Tyres Ltd. (supra) :- "Inspite of all these procedures contemplated under the provisions of the Companies Act, we find it difficult to accept the argument of the Revenue that it is still open to the assessing officer to re-scrutinize this account and satisfy himself that these accounts have been maintained in accordance with the provisions of the Companies Act. In our opinion, reliance placed by the Revenue on Sub-section (1A) of Section 115-J of....
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....nd held that profit shown in book profit cannot be tinkered or adjusted in any manner otherwise than the manner which is mandated in the said section of the Act. Even in cases where the assessee has taken capital receipt directly to the capital reserve without routing it through profit and loss account, Hon'ble Bombay High Court has held that the Assessing Officer cannot tinker the book profit duly disclosed in the profit and loss account on the touchstone of Hon'ble Supreme Court decision in the case of Apollo Tyres Ltd. (supra). Considering similar case by the ITAT in the case of Alok Industries Ltd. (ITA. No. 900 to 906/Mum/2019 dated 16.7.2020 has held as under :- "Upon careful consideration, we find ourselves in agreement with the submission of the learned Departmental Representative that the ITAT orders relied upon by the learned counsel of the assessee do not consider aforesaid Hon'ble Jurisdictional High Court decision. It is without any doubt that the decision of Hon'ble Jurisdictional High Court is exactly on the same subject as is being discussed hereunder. Furthermore, the proposition that book profit is not to be tinkered with is duly supported....