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TMI Blog2007 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... r and in any case, the order passed by learned CIT(A) upholding the order of the learned AO is illegal, bad in law, arbitrary, unjustified and against the principle of natural justice and deserves to be quashed. 3. That the assessee craves its leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other." 2. Rival contentions have been heard and record perused. In this case, AO invoked the provisions of s. 154 of the Act so as to increase the book profit computed under s. 115JA by disallowing the loss on sale of vehicle debited to the P L a/c, on the plea that this is a capital loss. Accordingly, the AO proceeded to recompute the profit declared under s. 115JA. As the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. As per learned Departmental Representative, it is deeming provision and, therefore, while computing the book profit under s. 115JA, the AO has correctly added back the loss on sale of vehicles which was essentially capital loss. 5. We have considered the rival contentions, carefully gone thorough the orders of the authorities below and also relevant provisions of the IT Act, 1961 as contained in s. 154 r/w s. 115JA of the IT Act, 1961 with reference to computation of book profit under s. 115JA of the Act, provisions of Companies Act, 1956 for preparing P L a/c as per provisions of Parts II and III of Schedule VI to the Companies Act, 1956. Sec. 115JA of the Act clearly indicates that it is a code in itself for computing the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The AO, therefore, has the limited power of making increases and reductions as provided for in the Explanation to s. 115J. The AO does not have the jurisdiction to go behind the net profits shown in the P L a/c except to the extent provided in the Explanation, The use of the words "in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act" in s. 115J was made for the limited purpose of empowering the AO to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, the AO has to accept th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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