2005 (12) TMI 463 - AT - Income Tax

Summary

Issues:
1. Interpretation of provisions of section 115JA(2) regarding preparation of separate Profit & Loss Account.
2. Applicability of judgment in the case of Apollo Tyres Ltd. to section 115JA.
3. Consideration of two provisos in section 115JA(2) in relation to the preparation of Profit & Loss Account.

Analysis:

1. The appellant contended that the Tribunal should have proceeded based on the statutory requirement of a separate Profit & Loss Account for section 115JA(2) and should have directed the lower authorities to consider such an account. The appellant argued that surplus on revaluation should be credited to a Revaluation Reserve Account as per Accounting Standards. The Tribunal had relied on a judgment related to section 115J, but the appellant argued that section 115JA requires a separate Profit & Loss Account. The Tribunal rectified the order, emphasizing the need for a separate Profit & Loss Account as per section 115JA(2) and directed the matter back to the Assessing Officer for fresh consideration.

2. The debate centered on whether the judgment in the case of Apollo Tyres Ltd. was applicable to section 115JA. The appellant highlighted the two provisos in section 115JA(2) that necessitate a separate Profit & Loss Account, making it distinct from section 115J. The Tribunal acknowledged the material difference these provisos create, indicating that the judgment in Apollo Tyres Ltd. was not directly applicable to section 115JA due to these unique provisions.

3. The Tribunal analyzed the provisions of section 115J and section 115JA, along with the judgments cited by both parties. It recognized that the two provisos in section 115JA(2) mandate the preparation of a separate Profit & Loss Account in accordance with specific requirements. The Tribunal concluded that failing to consider these provisions led to an apparent mistake in the previous order. Citing the duty of the Tribunal to apply the law correctly, the Tribunal rectified the order and directed the Assessing Officer to consider the Profit & Loss Account prepared as per section 115JA(2) for further assessment.

In summary, the Tribunal's decision highlighted the importance of adhering to the specific provisions of section 115JA(2) requiring a separate Profit & Loss Account, distinct from section 115J. The judgment in Apollo Tyres Ltd. was deemed inapplicable due to the unique requirements set forth in the two provisos of section 115JA(2. The Tribunal rectified the previous order, emphasizing the need for compliance with the statutory provisions and directing a fresh assessment based on the correct interpretation of the law.