TaxTMI 
TaxTMI 
2021 (11) TMI 1103
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....ance of prior period expenses. Question No.3 pertains to applicability of Section 115JB of Income Tax Act, 1961(for short 'the Act') to the assessee. It is clarified that in some of the appeals all the three questions arise whereas in some appeals two out of these questions are involved. However since these questions are based on identical facts and relate to the different assesment years concerning the assessee giving rise to different income tax appeals, we have heard the learned counsel for the parties and addressed these issues as involving in Income Tax Appeal No.158/2019 where all three questions arise. With respect to the second question noted above pertaining to disallowance of prior period expenses, it is undisputed position that the issue is covered against the department by the judgment of this Court and against which the Revenue had abandoned the appeals before the Supreme Court. In that view of the matter, this question is not entertained without recording independent reasons. Coming to the question of disallowance of depreciation, record would suggest that in the previous round of litigation, the High Court had remanded the question back to the ITAT. While doing s....
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....o five electricity distribution companies. The assets and liabilities were distributed amongst these five companies and in the process the assessee received certain assets. The cost of acquisition of the transferer company as well as the written down value were reflected in the books of accounts required to be statutorily maintained and audited. As pointed out by the counsel for the assessee, such assets would include machinery and other hardware even inspection of which would not be easy for the Assessing Officer. However only on the ground that such assets were not immediately available for physical verification the claim of depreciation could not have been disallowed. No question of law arises. This question is therefore not entertained. Coming to the last question of applicability of Section 115JB of the Act, we notice that other High Courts have under similar circumstances come to the conclusion that the said provisions prior to its amendment in the year 2012, would not cover the electricity company. The Kerela High Court in case of Kerela State Electricity Board Vs. Deputy Commissioner of Income Tax reported in (2010) 329 ITR 0091 had taken such a view in similar circumstanc....
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....5JB of the Act would apply to a banking company. Referring to and relying upon the Kerela High Court judgment in Kerela State Electricity Board (supra) in the context of a banking company, it was held and observed as under:- "9. In terms of sub-section (1) of Section 115JB of the Act thus notwithstanding anything contained in any of the provisions of the Act in case of an assessee being a company where the income tax payable on the total income as computed under the Act, is less than prescribed percentage of its book profit, such book profit shall be deemed to be the total income of the assessee. In so far as the language used under sub-section (1) of Section 115JB is concerned, the same pauses no challenge. Subsection (1) of Section 115JB takes within its swip all companies with no further bifurcation or distinction between companies. However, the question that calls for our consideration is whether the machinery provision provided under sub-section (2) of Section 115 JB of the Act is workable when it comes to the banking companies and such other special companies governed by the respective Acts. In the context, the question would also be of the legislative intent to cover such ....
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....ne hand, in terms of Section 210 of the Companies Act, 1956, the bank would be under an obligation to lay before Annual General Meeting its annual accounts including the profit and loss account. These accounts would be prepared in terms provisions contained in Banking Regulation Act, 1949. Sub-section (2) requires preparation of the accounts in terms of the Companies Act. Proviso to sub-section (2) would require maintaining the same parameters in relation to the accounting policies, accounting standards and method and rate of depreciation as adopted for the purpose of preparing the accounts, which would ultimately be laid before the Annual General Meeting. A Banking company in terms of sub-section (2) of Section 115JB can prepare additional accounts as per provisions of Parts II and III of Schedule VI of the Companies Act or fulfill the requirements of the proviso to sub-section (2) but cannot fulfill both the conditions. 11. This legal dichotomy emerging from the provisions of sub-section (2) of Section 115JB particularly having regard to the first proviso contained therein in case of a banking company, would convince us that machinery provision provided in subsection (2) of sec....