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TMI Blog2002 (8) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Act and that provision overrides any other provisions of IT Act. Therefore, the commercial concept as contemplated by Companies Act has to prevail over a concept under the Income-tax Act. 1.1 The learned Commissioner ought to have held that in rare cases where the Assessing Officer has given such power, there should be material to hold that the company has perpetuated a fraud or misrepresentation of facts. He ought to have held that there is no material to hold that such a serious charge could be levelled against the company. 1.2 The learned Commissioner ought to have held that the impugned addition to book profit of Rs. 5,37,42,942 has already been included in the assessment for 1996-97 and unless that has been validly and legally vacated, the same amount cannot again be considered in the next assessment year 1997-98; he ought to have held that whether this is assessable in 1996-97 or not is highly debatable and not amenable to rectification as the Assessing Officer had done without even giving an opportunity of hearing. 1.3 The learned Commissioner erred in assuming that the addition made to book profits could be considered as income in a commercial sense as coming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He ought to have known that by this expression the assessee is referring to the formal acceptance of OTS by the creditors individually and this is made clear by the latter part of the same paragraph in the letter where it is mentioned that considerable time would be taken for sanction of OTS by the participating creditors. He ought to have known that the Consortium of Creditors on 17-4-1996 had taken an in-principle decision and that is only an informal, nevertheless consensus decision, since it was not a formal acceptance as between the creditor and debtor as per records, each creditor has to individually quantify the benefit of OTS and this takes time. 2.4 The learned Commissioner ought to have held that the decision of the Consortium on the meeting of 17-4-1996 was known to the assessee on that day itself since the assessee's representative was present at the meeting. 2.5 The learned Commissioner ought to have understood the correct import of the letter of 30-5-1996 where it says: "we understand that the 'cut-off-date' has been fixed at 31-3-1996". This can arise only after the acceptance in principle of OTS subject to a different cut-off-date. 3. The learned Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that these levies are invalid as held by Karnataka High Court in Kwality Biscuits Ltd.'s case. 5. The learned Commissioner erred in upholding the disallowance under section 43-B of the expenditure of profession tax and property tax. He ought to have held that the assessee is entitled to claim deduction of those expenditure. 6. The learned Commissioner erred in disallowing Rs. 3,81,004 under the head "P.F. Loan". He ought to have known from the nomenclature itself that it is not the contribution to Provident Fund. He ought to have found that the sum represents the loan sanctioned to the employees of the company and they represent monies payable to them by the Trustees of the Provident Fund. He ought to have known such payments do not come within the ambit of section 43B at all. He ought to have allowed the deduction. 7. The learned Commissioner erred in holding that the addition of Rs. 10,51,91,185 was valid. He ought to have held that the addition could not be made for the assessment year 1997-98 since it has been already included in the assessment for 1996-97 and addition again for this year would amount to double assessment of the same income for two years. He ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. This was not accepted by the Assessing Officer on the ground that the events relating to OTS which had taken place after 31-3-1996 do not relate to the conditions existing as on the balance-sheet date i.e., 31-3-1996. According to him, unless and until the OTS proposal is accepted by the consortium, it could not be said that conditions were existing as on 31-3-1996 relating to OTS. He was also of the view that Accounting Standard-4 relating to the OTS is not at all applicable to the assessee. He was further of the view that the assessee's claim that waiver of interest being an extra-ordinary item required to be disclosed in the financial statements for the financial year 1995-96 as part of net income as per Accounting Standard-5, by the same accounting standard interest waiver should be disclosed in the P L account for the financial year 1996-97 relating to the assessment year 1997-98. Since the P L account prepared by the assessee for the year under consideration was not according to the provisions of Parts-II and III of Schedule VI of the Companies Act, 1956 and accounting standards prescribed by the ICA, the Assessing Officer considered the action of the assessee in not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to disallowance made under section 43B was also decided against the assessee as though it was mentioned in the grounds of appeal that profession tax etc. were paid in time, no proof was furnished. 3.3 The next ground agitated before the 1st appellate authority was that the Assessing Officer was not right in holding that the income under section 41(1) of Rs. 10,51,91,185 arose during the previous year relevant to the assessment year under appeal which according to the assessee actually accrued during the previous year relevant to the assessment year 1996-97. For the same reasons given for upholding the addition of Rs. 5,37,42,942 the 1st appellate authority upheld the present addition too. 3.4 The assessee had further raised an additional ground on the levy of interest under section 234B and relied on the decision of the Supreme Court in the case of CIT v. Ranchi Club Ltd. [2001] 247 ITR 209. The 1st appellate authority distinguished the facts obtaining in the apex Court's decision of Ranchi Club Ltd. from the facts of the present case and dismissed the ground. The result was the assessee failed on all grounds raised before the Commissioner (Appeals). 4. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Penkar v. CIT [1948] 16 ITR 183 where waiver of interest on mortgage was held as not income which decision was approved by the Supreme Court in C. Ag. IT v. Kerala Estate Mooriad Chalapuram [1986] 161 ITR 155 and the decision of the apex Court in Hukumchand Mohanlal's case. He contended that since there is no definition of income or profits in Sch. VI of the Compo Act, general law would apply and it cannot be treated as income. He further contended that AS-9 does not recognise it. 4.2 Coming to the second proposition he argued that the assessing officer has no power to tinker with the P L account drawn up as per Companies Act. His powers are confined to what is given in section 115JA. He relied on the Special Bench decision of the Tribunal in the case of Sutlej Cotton Mills Ltd. v. Asstt. CIT (SOT 124 at page 1107) wherein it was held that unless the Assessing Officer finds that the accounts were not drawn up as per Schedule VI of Companies Act, he has no power to alter the figures. The Companies accounts have to be audited by Chartered Accountants who have to follow the mandatory rules given in the accounting standards issued by Institute of Chattered Accountants of India. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 11-3-1996 the date of last clarification and 17 -4-1996. The proposal was on the anvil from October, 1995 as is clear from the page 6 of the Commissioner's order. He therefore submitted that the requirements of AS-4 are fully satisfied and since it is mandatory the accounts should show this in the year ended 31-3-1996. As already stated the amount involved being Rs. 18 crores it is a big event for a Company with a capital of Rs. 16 crores. On application of AS-4 he referred to an example given in Spice and Pegler 'Accountancy'. He then invited our attention to Illustration 5(6) at page 293, a photo copy of which is contained in the paper book at page 126, wherein the Company closed its accounts on 30-6-1995 but sales of two divisions which took place a few days after 30-6-1995 were taken into account. He further submitted that the Allahabad High Court too held in CIT v. V.B.S. Publishers Distributors [1984] 147 ITR 114, on the basis of the Apex Court's decision in CIT v. Shoorji Vallabhdas Co. [1962] 46 ITR 144 (SC) that events after the date of balance-sheet can be considered. 4.4 Coming to the fourth proposition, the learned counsel for the assessee submitted that the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees which have to be passed on to PF Trust. 4.9 On the addition of Rs. 10,59,90,185 which was held by the first appellate authority as validly made, the learned counsel submitted that this is part of interest waived. According to him this can be added only under section 41(1) but since these amounts have not been allowed as a deduction on the basis of section 43B as per the Supreme Court's decision Tirunelveli Motor Bus Services Co. P. Ltd. v. CIT [1970] 78 ITR 55, these cannot be added. 5.1 The learned Departmental Representative countered the submissions of the learned counsel for the assessee as follows. He submitted that the decision of the House of Lords in British Mexican Petrolium Co. Ltd. relied on by the assessee's counsel has no application to the present case. He distinguished that case from the assessee's case, stating that the circumstances in the assessee's case are entirely different from that obtained in the case decided by the House of Lords. Coming to the second decision relied on by the learned counsel for the assessee in support of his first proposition i.e., the decision of the Bombay High Court Moxican Petrolium Co. Ltd.'s case, the learned Departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r similar circumstances. The learned Departmental Representative further relied on the decision of the Supreme Court in the case of Bhagawandas Jain v. Union of India (128 ITR 315) to contend that which can be converted into income can be reasonably regarded as giving rise to income. He submitted that it is well settled that the entries in the Lists in the Seventh Schedule to the Constitution should not be read in a narrow or restricted sense and each and every subject mentioned in the entries should be read as including within its scope all ancillary and subsidiary matters which can fairly and reasonably be comprehended in it. Words in the Constitution conferring legislative power should be given a liberal construction and should be interpreted in their widest amplitude. He pointed out that in the instant case, the assessee had saved amount by not paying interest through OTS to Banks/FIs and reported interest income in its extended annual report for the period ended 30-9-1996. From the above, he concluded his submissions, saying that the assessee considered waiver of interest as an income and therefore it submissions that it is not income according to general law is not proper and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exceptional nature. Further clause 3(xii)(b) of Part-II of Schedule VI to the Companies Act requires disclosure of profit or losses from such transactions. Therefore in the given circumstances in the assessee's case, applying accounting standard 5(AS 5), interest waived under the OTS should have been shown in financial year relevant to assessment year 1997-98 for the purpose of computing income under section 115JA of the Act. He also pointed out that the letter dated 30-5-1996 issued by the assessee to IDBI indicated that till that date proposal of the assessee for waiver of interest was not accepted. Quoting from the said letter, the Departmental Representative submitted that the said letter clearly revealed that approval from the participant financial institutions and banks will not come through before 30-9-1996. He submitted that though the approval letter dated 8-7-1996 of IDBI provided that the proposal for OTS are agreeable in principle it had put many conditions. The said letter inter alia contained the following two main conditions: (1) As a pre-condition to the OTS, the company shall obtain the approval of all participating institutions/banks for settlement of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative submitted that the letter dated 13-2-1996 clearly showed that the OTS proposal submitted by the assessee on 5-2-1996 was not accepted by the IDBI. Further he pointed out that the assessee's letter dated 11-3-1996 mentioned that it will submit a detailed proposal before the end of the month. This circumstance, according to the learned Departmental Representative, go to show that before the issue of letter on 8-7-1996 by the IDBI, the proposal was at initial stage which was rejected by the IDBI. From what has been stated above, it would be clear, he submitted, that the assessee did not prepare its P L account as on 31-3-1996 and 31-3-1997 filed along with the return of income for the assessment years 1996-97 and 1997 -98 respectively, according to Part II and Part III of Schedule VI of the Companies Act. Further it is also clear that the P L account prepared by the assessee for the financial years are misleading as it gives incorrect income of the assessee as per the provision of section 205(1)(b) of the Companies Act. Section 211(2) of the Companies Act requires that every Profit and Loss account of the company shall give a true and fair view of the profit and loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as income of the current accounting year i.e., 1996-97 for the purpose of determining book profit in accordance with the provisions of section 115JA of the Act. Referring to the decision of the Allahabad High Court in U.B.S. Publishers Distributors case relied on by the assessee's counsel, the learned Departmental Representative submitted that the facts of that case are entirely different from those obtaining in the assessee's case, and therefore distinguishable. In the said case the accounting period ended on 31-5-1966 whereas the devaluation of currency took place on 6-6-1966. The assessee had imported books for the purpose of his business. As all circumstances were in existence at the end of the accounting year i.e., 31-5-1996, the Court held that the liability to pay in foreign currency accrued when the books were imported. However, in the assessee's case all events viz., calling of consortium meeting of FIs/Banks, approval of proposal by the FIs/Banks, acceptance of OTS by assessee with condition given in the approval letter of IDBI etc. were in the financial year 1996-97. In view of this in the assessee's case, it cannot be said that circumstances were in existence a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee's counsel in the Vth VIth propositions were raised for the first time, the learned Departmental Representative contended, on 12-1-2001 and in his written submission it has not submitted any application for entertaining the additional grounds as required under Rule 11 of the IT (Appellate Tribunal) Rules, 1963. He, therefore contended that the above two grounds cannot be entertained. Further the assessee has also not raised the above grounds before the first appellate authority too. Without prejudice to his above submissions, he argued that as per Explanation to section 115JA(2), 'book profit' means the net profit as shown in the P L account for the relevant previous year prepared according to the provisions of Part-II and Part-III of Schedule VI of the Companies Act. He argued that since the assessee company has not debited interest payable as claimed above in the profit and loss account, any extra claim or notional liabilities on the basis of Assessing Officer's finding for considering interest waiver in the Financial year relevant to assessment year 1997-98 cannot be entertained. He relied on the decision of the M.P. High Court in the case of Krishna Oil Extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the decisions of the M.P. High Court in the case of Itarsi Oils Flours (P.) Ltd. v. CIT [2001] 250 ITR 686 and of the Gauhati High Court in the case of Assam Bengal Carriers Ltd. v. CIT [1999] 239 ITR 862. 5.6 Coming to the regular assessment order, on the issue of disallowance under section 43B of Rs. 3,81,004 raised by the assessee's counsel, since no details/proof were furnished before the lower authorities, this issue can be set aside and remanded back to the Assessing Officer for verification and necessary action, the learned Departmental Representative submitted. 5.7 As regards the other issue raised by the learned counsel for the assessee in respect of the addition of Rs. 10,59,90,185, the learned Departmental Representative submitted that this is an additional ground raised by the assessee's counsel at the time of hearing and in his written submission. It was neither taken before the Commissioner (Appeals) nor before the Tribunal. He, therefore, argued that this ground need not be entertained. 5.8 Without prejudice to his contentions aforesaid, the learned Departmental Representative mentioned that in the computation of total income for the assessment year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to section 115JA contains a book profit. What it all says, according to the learned counsel, is the adjustments to be made to book profits. The Companies Act also does not give a definition. The learned counsel, therefore, submitted that profit as per commercial parlance and general law would apply, and there is no escape for the finding that remission of interest is not income. Inviting our attention to the fact that in the printed balance-sheet this amount of Rs. 5.37 crores was shown as a credit in the P L account, the learned counsel also pointed out that the accounts prepared for the year ended 31-3-1996 also carried this figure for the purpose of filing the return. To the query of the Bench that since the accounts show the interest waiver as income why this should not be considered as part of 'book profit', he has drawn our attention to the entry in the printed balance-sheet and submitted that it did not say that the Banks and FIs have written of the interest. He has particularly drawn our attention to the words used (Note 3 at page 14 of the printed B/S) which read as under: ".........at the consortium meeting agreed in principle for the proposal of the company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. It is for the Department to show that it is income in nature in law and it is relatable to the year ended 31-3-1997. He therefore replied that these are not relevant and does not advance the Revenue's case. He also pointed out that each assessment year is separate and has to be assessed on the facts of that particular year. He further stated .the assessee had shown the item in the printed account for an earlier year may be due to a mistake and there is no law which says that if it had made a mistake for 1996-97, it should be deemed to commit the same mistake in the succeeding years too. The learned counsel distinguished the decision of the Karnataka High Court in Kwality Biscuits Ltd.'s case which was relied upon by the Revenue for the proposition that amounts written back to P L account cannot be excluded while making computation under section 115. Quoting from page 523 of the report, he submitted that what was credited in that case was excess depreciation debited to accounts due to change in method, and this is not write off of waiver of interest. In particular, he referred to the observation of the Court that this arose out of change in the accounting system and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the formal and legal document of waiver, the assessee tried to get some further concession by requesting to shift the cut-off date to 30-9-1996. But by this letter what was accepted in principle on 17-4-1996 does not get wiped out. He ultimately submitted that the letter of the IDBI dated 8-7-1996 was only for formalisation of principles already agreed to, and there is nothing more to it. Regarding the change of accounting year from 31st March to 30th September, he pointed out that this was made much earlier to the consortium meeting on 17-4-1996. On the contention of the revenue that item 3(iv) of AS-9 would deal with obligation waived in the same accounting year, the learned counsel, submitted that that is not at all apparent from the AS. On the conclusion drawn by the Revenue that the accounts were not as per Schedule VI, he submitted that the inference is an erroneous one not warranted by evidence. He contended that barring the year for showing the interest waiver which as per events took place before 31-3-1996 which was considered on 17-4-1996 and which the assessee showed for the year ended 31-3-1996 there is nothing with the Department to show that the Profit and Loss accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sixth propositions that since the grounds therein are new grounds and should not be entertained the assessee's reply is two-fold. Firstly he submitted that when the entire addition is challenged, no separate ground is required to challenge what is only a part of the whole. This is well settled proposition in law. Secondly, it is not necessary for the Tribunal to confine itself strictly to the grounds of appeal. Reliance was placed on the decision of the Supreme Court in the case of CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 wherein the Apex Court held that the right of the assessee to relief is not restricted to the pleas raised by him. The learned counsel for the assessee submitted that the interest of Rs. 11 crores claimed to be the correct debit for the year ended 31-3-1996 is in fact not debited and the Revenue must go by the P L account drawn up by the assessee. He submitted that there are more than one consequence for shifting the OTS from year ending 31-3-1996 to 31-3-1997. Not only the waiver gets shifted but other consequences must also be given effect to. He submitted that after all the finding of the assessing officer is not on a prior reasoning. He did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is less than thirty percent of the book profits, then, it has to prepare a profit and loss account under sub-section (1A) of section 115J for the relevant previous year.." The learned counsel then submitted that the steps envisaged by the Karnataka High Court was endorsed by the jurisdictional High Court also and so it has to be held that even as per the A.P. High Court the payment of advance tax would be falling at a time when the year is over. However, he submitted that though this decision is not on the point of interest under section 234B, but since the reason given by the Karnataka High Court is found here too, the decision of the Karnataka High Court should be followed. He further submitted that though the decision of the Hon'ble A.P. High Court was reversed by the Supreme Court, this point was not commented upon by them. 6.6 Before concluding his submissions, the learned counsel for the assessee, reverting to the query made by the Bench as to why an amount cannot be assessed if it is shown in the P L account irrespective of the position in law, relied on one more authority in Sutlej Cotton Mills case (SOT 1107) wherein at para 19.5 the Special Bench pointed out as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of declaring dividend. It is proposed to allow the same adjustments in computation of book profits for purposes of new provision for levy of minimum tax." 10. This is a company which was in losses for a number of years and which could not meet the commitments for repayments towards loans and interest to various banks and financial institutions. It was a potential sick company. All the public financial institutions i.e. IDBI, IFCI, ICICI etc. and public sector banks such as S.B.I. and P.N.B. have come together and accepted a one time settlement of liabilities to-bail out the company and in the process waived substantial portions of the interest due to them. Thus to our mind, taxing such a Company under the provisions of section 115JA is itself against the legislative intent. This is definitely not a prosperous company paying dividends. With this background we now examine the arguments of both sides. 10.1 The first and foremost ground of the assessee is that the Assessing Officer cannot assume jurisdiction to calculate the book profits for the year ended 31-3-1996 as well as for the year ended 31-3-1997 which is in appeal. On this ground the assessee is bound to succeed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 5,37,42,942 in its accounts as on 31-3-1996. The claim of the Company is that the balance-sheet although drawn up by it as on 31-3-1996 is as per Part II and Part III of Schedule VI of the Companies Act and that it has been certified as such by its statutory auditors. The assessing officer has not completely recast the balance-sheet as on 31-3-1996. We agree with the contentions of the learned counsel for the assessee that OTS has two consequences, viz., (i) waiver and (ii) reduction of interest payable. If the OTS had to be ignored in toto then the interest of Rs. 11.43 crores is to be debited to the profit and loss account for the year ended 31-3-1996 against the interest of Rs. 4.5 crores debited by the assessee. Only one aspect of the entire transaction cannot be taken while ignoring the other aspect. In other words, the Assessing Officer ought to have done a complete exercise of recasting the profit and loss account as at 31-3-1996 which only would have given him the correct figure of loss that has to be carried forward. Without recasting all the figures of the earlier years, the accounts drawn up by the company, cannot be disturbed for the simple reason that it would gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills v. ACIT(Selected Orders of ITAT page 1107) giving the Revenue a right to recast the profits drawn up under Schedule VI of the Companies Act in case there is a fraudulent and misleading statement does not hold good any more in view of the judgment of the Hon'ble Supreme Court in the case of Appolo Tyres Ltd. 10.3 The second argument put forth by the assessee is that the waiver of interest and consequent reduction in liability is not income under the general law. At this juncture, we observe that the total waiver of interest is Rs. 18.67 lakhs. The Revenue has taken only 5.37 lakhs into consideration the reason being the assessee has taken only that amount as its income in its profit and loss account. The balance has been directly taken into the balance-sheet by the assessee company i.e. it has not routed this interest waiver through its profit and loss account. We cannot understand how the Revenue had not applied the same Yardstick for that amount of interest waived directly transferred by the assessee to the balance-sheet as it has applied to that portion of interest waiver which was credited by it as extra-ordinary item in the balance-sheet. In our considered opinion, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore High Court in the case of CIT v. Lakshmamma [1964] 52 ITR 789 had practically approved the judgment of the Hon'ble Bombay High Court. Further the Hon'ble Supreme Court in the case of Bipinchandra Maganlal Co. Ltd. held as follows: "In computing the profits and gains of a company under section 10 of the Act, for the purpose of assessing the taxable income, the difference between the written down value of the machinery in the year of account and the price at which it was sold (the price not being in excess of the original cost) is to be deemed to be profit in the year of account, and being such profit, it is liable to be included in the assessable income in the year of assessment. But this is the result of a fiction introduced by the Act. What is truth is a capital return is by a fiction regarded for the purposes of the Act as income. Because this difference between the price realised and the written down value is made chargeable to income-tax its character is not altered, and it is not converted into the assessee's business profits. It does not reach the assessee as his profit: it reaches him as part of the capital invested by him, the fiction created by section 10(2)(vii), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve any other alternative but to agree with the arguments of the learned counsel for the assessee. No contrary judgments have been brought to our notice. Shri Meena tried to distinguish these judgments. We are unable to agree with him and we are bound by the judgments and propositions. Thus this ground of the assessee has to be allowed. 10.7 Even otherwise as already stated it appears that the Revenue has limited its arguments to an amount of Rs. 5.37 crores only and not to the entire amount of Rs. 18.67 crores. If this logic of the Revenue that only Rs. 5.37 crores of waived interest out of a total of Rs. 18.67 crores is to be considered as income for the sole reason that the assessee had shown it in its books of account as such then we have to disagree for the reason that the Hon'ble Supreme Court in India Discount Co. Ltd.'s case laid down the proposition that "a receipt which in law cannot be regarded as income, cannot become so merely because the assessee has erroneously credited to the P L a/c.". The argument of the assessee that increase in the profit and loss account could be of the type which does not have any characteristics of income or expenditure has force and these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar methodology of calculation and because this Bench is bound to apply a decision which is favourable to the assessee in case of conflict in decisions and because the proposition on which the Hon'ble Karnataka High Court decided the matter has not been reversed. 11.1 The relevant portion of the headnote of the judgment of the Karnataka High Court in the case of Kwality Biscuits Ltd. reads as under: "Since the entire exercise of computing the income or that of book profit could be only at the end of the financial year, the provisions of section 207, 208, 209 or 210 cannot be made applicable unless and until the accounts are audited and the balance-sheet is prepared, because till then even the assessee may not know whether the provisions of section 115J would be applicable or not. The liability would be after the book profits are determined in accordance with the Companies Act. The words "for the purposes of this section" in the Explanation to section 115J(1A) are relevant and cannot be construed to extend beyond the computation of liability of tax. Hence interest cannot be charged under sections 234B and 234c." The Gauhati High Court in the case of Assam Be 11gal Carriers Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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