9911796707
TMI Blog1995 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... tarting point net profit of Rs. 5,61,114 disclosed by the Profit Loss Account of the assessee. After making some disallowances, he computed the income before set off of the unabsorbed depreciation and the loss carried forward from the previous years at Rs. 5,98,239. Thereafter he allowed the assessee the benefit of set off of (a) business loss of Rs. 1,73,458 relating to assessment year 1985-86, and (b) unabsorbed depreciation relating to the assessment years 1976-77, 1977-78, 1981-82, 1982-83, 1985-86 and 1986-87 aggregating Rs. 2,29,818. In other words, against the income of Rs. 5,98,239 referred to supra the Assessing Officer set off an aggregate sum of Rs. 4,03,276. In the process he determined the assessee's taxable income at Rs. 1,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) the working adopted by the Assessing Officer. The working sheet is reproduced below : Assessee's working : Rs. Profit for the assessment year 1990-91 5,86,974 Less: 115J profit taxed 1,73,804 -------- Balance being amount set off against earlier years' unabsorbed business losses : 4,13,170 -------- 1982-83 3,01,824 1985-86 1,11,346 -------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme of section 115J is that the assessee's total income must first be computed in the normal fashion and in accordance with the provisions of the Act. Thereafter, the 'book profit' of the assessee must be computed in accordance with the provisions of section 115J(1). Wherever, it is found that the total income as computed in accordance with the provisions of the Act (excluding of course those of section 115J) is found to be less than 30% of the 'book profit' as computed under section 115J(1), then an amount equal to 30% of the book profit shall be deemed to be the total income of the assessee and will be brought to tax as such. Section 115J(2) of the Act goes on to clarify that nothing in section 115J(1) shall affect the determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to him, the provisions of section 80VVA(4) are not relevant. He, therefore, urged that the assessee's appeal on this issue should be dismissed without much ado. 10. We have looked into the facts of the case. We have considered the rival submissions. 11. In this case we are concerned with the assessment for the assessment year 1991-92 and in relation to the said assessment year the provisions of section 115J are not applicable for the simple reason that the said provisions were applicable only in relation to the assessment years 1988-89, 1989-90 and 1990-91. Even so, the provisions of section 115J falls to be considered in relation to the assessment year 1991-92 because of what we may call the cascading effect of that section. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricting the aggregate amount of the bounties available under the Act to a particular extent is essentially ad hoc in character. Parliament was aware of this and it was, therefore, that Parliament went on to incorporate suitable provisions under sections 80VVA(4) and 115J(2). The rationale behind these provisions is that other benefits such as carry forward and set off of business losses, carry forward of unabsorbed investment allowance, carry forward of deficiency under section 80J(3) and the like that are normally available to the assessee should not be interfered with. 14. Now, section 115J starts with a non obstante clause. This is understandable because the intention of Parliament was that all the other provisions of the Act governin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction, namely, to ensure that zero-tax companies pay tax on at least 30% of the book profit. Once tax is levied on 30% of the book profit, that section has achieved its purpose. Section 115J(2), on the other hand, has a different role to play, namely, to protect the statutory rights of the assessees in relation to carry forward and set off of business losses, etc. The provisions of that section will have to be given effect to independently. Hence, the operation of section 115J(2) in no way nullifies the provisions of section 115J(1). We, therefore, dismiss the related arguments of the learned Departmental Representative. 18. In view of the foregoing, therefore, we hold that the assessee is entitled to succeed. We order accordingly. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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