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2014 (1) TMI 874 - AT - Income TaxComputation of book profits u/s 115J of the Act Held that - The assessee failed to comply with the directions and could not support and substantiate its claim on this issue by furnishing the relevant particulars and by justifying its claim on the basis of relevant provisions of the Act - Keeping in view this failure of the assessee to discharge the burden that lay on it to support and substantiate its claim by producing the relevant particulars and by referring to the relevant provisions of the Companies Act despite specific direction by the Tribunal there was no justifiable reasons to interfere with the order of the CIT(A) confirming the computation of book profit made by the AO for the purpose of section 115J after rejecting the claim of the assessee for set off of unabsorbed depreciation and brought forward business loss the order of the CIT(A) upheld Decided against Assessee. Charging of Interest u/s 234B of the Act Held that - The decision in CIT vs. Kwality Biscuits Ltd. 2006 (4) TMI 121 - SUPREME Court Snowcem India Ltd. vs. DCIT 2009 (1) TMI 6 - BOMBAY HIGH COURT followed order of the CIT(A) deleting the interest levied by the AO u/s 234B when the income was computed u/s.115J upheld Decided against Revenue.
Issues:
1. Computation of book profits u/s-115J of the Income Tax Act. 2. Charging of interest u/s 234B while computing income based on book profits u/s.115J. Issue 1: Computation of Book Profits: The case involved cross-appeals against the order of ld. CIT(A)-37, Mumbai, dated 21.06.2010. The primary issue was the computation of book profits u/s-115J of the Income Tax Act. The AO disallowed the claim for set off of unabsorbed depreciation and brought forward business loss against the book profit. The Tribunal directed the assessee to prove the claim in accordance with section 205 of the Companies Act. The assessee argued that the Investment Allowance Reserve should be debited to the P & L Account as per the Companies Act. However, both the AO and CIT(A) found the assessee failed to comply with the Tribunal's directions and could not substantiate the claim. Consequently, the computation of book profit made by the AO was upheld, and the appeal of the assessee was dismissed. Issue 2: Charging of Interest u/s 234B: The second issue was related to charging interest u/s 234B when computing income based on book profits u/s.115J. The AO levied interest u/s 234B for failure to pay advance tax. The ld. CIT(A) deleted the interest based on precedents like CIT vs. Kwality Biscuits Ltd. and Snowcem India Ltd. The Tribunal considered the arguments and upheld the ld. CIT(A)'s decision, citing relevant case laws and distinguishing provisions of section 115J and 115JA. The decision was in favor of the assessee, following the Supreme Court's ruling in Kwality Biscuits Ltd. and Snowcem India Ltd. The appeal of the revenue was dismissed accordingly. In conclusion, both the appeals of the assessee and the revenue were dismissed, with the Tribunal upholding the orders related to the computation of book profits and the charging of interest u/s 234B. The judgment provided detailed analysis and application of relevant legal provisions and precedents to resolve the issues effectively.
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