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TMI Blog2012 (7) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... ime?" 2.The assessee is engaged in the business of manufacture and sale of windmills, power generation and airlines. In the return of income filed on 28.11.1997, the assessee showed the book profit before the Assessing Officer at Rs.5,537.87 lakhs. The assessee further admitted Rs.1,601.36 lakhs being 30% of the book profit as deemed income under Section 115JA of the Income Tax Act. Evidently, the assessee did not pay the tax on the basis of the book profit calculated under Section 115JA. 3.It is a matter of record that on 8.7.1999, the assessee filed a revised return of income for the same assessment year 1997-98 along with revised profit and loss account and balance sheet, showing 'book loss' before taxation in the place of 'book profit' as shown in the original profit and loss account. It is stated that the said course was adopted by the assessee, consequent on the order passed by the Registrar of Companies, on an inspection conducted by him under Section 209A of the Companies Act, 1956 pointing out certain mistake committed, while preparing the original profit and loss account and balance sheet. 4.It is further seen from the narration that the revision t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at during the course of assessment proceedings, the assessee was asked to produce the book of accounts based on which the revised profit and loss account and balance sheet were prepared. Since the assessee had not produced any document regarding revised profit and loss account and balance sheet and conduct of extra ordinary General Meeting to prove the genuineness of the division of accounts on the basis of the order of the Registrar of Company Affairs for verification, the Assessing Officer viewed that the assessee is liable to pay tax under Section 115JA as determined under Section 143(1)(a) on the basis of the original return of income. 8.Thus, the Assessing Officer viewed that the observation made by the Regional Director was only with respect to method of accounting of inter divisional transfer of windmills rather than valuation of inter divisional transfer of windmills. Hence, the assessee should have credited the expenditure account to the extent of Rs.10,261 lakhs i.e. transfer price of 24 windmills rather than crediting the same to the sales account. In considering the same, the Assessing Officer pointed out that enquiries conducted with the Registrar of Companies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once again by the officer. Aggrieved by the same, the Revenue preferred the present appeals before this court. 11.It is evident from the reading of Section115JA that an assessment to MAT arises only when the total income as computed under this Act is less than thirty per cent of its book profit, that the total income of the assessee chargeable to tax is deemed to be an amount equal to thirty per cent of such book profit. Explanation to this Section defines 'book profit' to mean the net profit as shown in the profit and loss account prepared under sub section (2) of Section 115JA that for the purposes of assessment under section 115JA, every assessee being a company has to prepare its profit and loss account for the relevant assessment year in accordance with the provisions of Parts II and III of Schedule VI to the companies Act 1956. 12.In considering the said provision, in the decision reported in (2002) Vol. 255 ITR page 273 (SC) (Apollo Tyres Ltd v. Commissioner of Income Tax), the Apex Court held that while computing the book profits of a company under section 115J, the Assessing Officer has a limited power of examining whether the books of account are certifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of the Companies Act. Once the book results show negative, the question of invoking the provisions under Section 115 JA does not at all arise herein. 15.In the background of the above said facts, the question arises for consideration herein is as to whether the revised profit and loss account and balance sheet in the form of revised returns would really have to be considered by the Assessing Officer within the meaning of Section 139(5), as the same has already been rejected as non est in the eye of law. 16.As already noted above, the assessment under Section 115JA arises only on the stated circumstances of the total income computed under the Act less than 30% of the book profit. Once the step is crossed and the assessment is to be made under Section 115 JA, it is unnecessary for the Assessing Officer to rescrutinize the accounts and satisfy himself that the accounts have been maintained in accordance with the provisions of the Companies Act. When accounting of the transaction between the units of the company was found to be incorrectly entered as sale and as pointed out to be so by the Regional Director, the company corrected the same that the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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