TaxTMI 
TaxTMI 
2008 (4) TMI 141
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....declaring taxable income of Rs. 2,35,379/- under sec.115J of the Act. The Assessing Officer did not accept the book profit worked out by the assessee under sec. 115J of the Act and added the sum of Rs. 5,73,451/- to the book profit declared by the assessee. According to the Assessing Officer, the tax deducted at source (T.D.S.) on dividend received from various companies had wrongly been excluded while showing the income from dividend. 3. The assessee carried the matter in the appeal before the Commissioner (Appeals) who confirmed the action of the Assessing Officer vide order dated 9.7.1991. The assessee carried the matter in second appeal before the Tribunal who also confirmed the orders of Assessing Officer and Commissioner (Appeals) vide impugned order dated 17.9.1996. The assessee moved Miscellaneous Application before the Tribunal requesting the Tribunal to rectify the apparent error in the appellate order. Vide order dated 13.11.1997 the Tribunal rejected Miscellaneous Application holding that no apparent mistake existed in the order of the Tribunal so as to require modification. 4. The principal case of the assessee is based on paragraph No. 3 (xi) of Part-II of Sched....
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....Board P. Ltd. (2007) 294 ITR 57 (Madras) (4) Commissioner of Income-tax, Ludhiana vs. Sona Woollen Mills (P.) Ltd. (2007) 160 Taxman 22 (P & H) (5) Amines And Plasticizers Ltd. vs. Deputy Commissioner of Income-Tax. (2008) 296 ITR 727 (Gauhati) (6) The judgment rendered by Supreme Court on 10.4.2008 in Civil Appeals Nos. 5420 to 5423 of 2002 in the case of Malayala Manorama Co. Ltd. vs. Commissioner of Income Tax, Trivandrum. - Since reported in (2008) 300 ITR 251 (S.C.) 6. On behalf of the respondent - Revenue, learned Senior Standing Counsel Mr. M.R. Bhatt supported the order of the Tribunal by pointing out that dividend was income within the meaning of Sec. 2(24)(ii) of the Act and the said amount has to be taken as the gross amount as provided under sec. 198 of the Act. He also referred to section 8 of the Act. That therefore, if the assessee had reduced the gross amount of dividend by the amount of T.D.S., such an exercise should not be permitted and the revenue was justified in adding the amount of tax deducted at source to the figure of net profit arrived at after computing Book Profit under the Companies Act. It was further submitted that under clause(a) of the ....
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....h a deeming provision which makes the company liable to pay tax on at least 30 percent of its book profits as shown in its own account. For the said purpose, section 115J makes the income reflected in the company's books of account the deemed income for the purpose of assessing the tax. If we examine the said provision in the above background, we notice that the use of the words 'in accordance with the provisions of Parts II and II of Schedule VI to the Companies Act' was made for the limited purpose of empowering the assessing authority to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, an Assessing Officer under the Income-tax Act has to accept the authenticity of the accounts with reference to the provisions of the Companies Act which obligates the company to maintain its account in a manner provided by the Companies Act and the same to be scrutinised and certified by the statutory auditors and will have to be approved by the company in its general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and satisfy that the accounts of the company are main....
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....ed, the Tribunal has in no uncertain terms stated "Having regard to the provisions of part II & III of Schedule VI of the Companies Act, we are of the opinion that the assessee has prepared its book profit correctly as per the said provisions." The next stage thereafter would be to make increases or reductions as provided in the Explanation to sec. 115J of the Act. The Apex Court has stated in the aforesaid judgment that the Assessing Officer has the limited power of making increases or reductions as provided for in the Explanation and does not have jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J of the Act. 10. Section 115J of the Act, more particularly, the Explanation permits increases of the amounts specified in clauses (a) to (f) provided any such amount is debited to the profit and loss account. Clause (a) which relates to the amount of income tax paid or payable, can be added to the net profit as shown in the profit and loss account provided such an amount of income tax paid or payable is debited to the profit and loss account. Admittedly, in the present case, there is no debit ....