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TMI Blog2014 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the purpose of calculating the profits u/s 115-J of the Act - the AO while computing the income u/s 115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been property maintained in accordance with the Companies Act - the AO does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115-J – thus, the AO had committed an error in redrawing the profit and loss account by making changes by adding depreciation debited to profit and loss account by the assessee, which is impermissible – thus, the order of the order of the Tribunal is set aside – Decided in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal was justified in upholding the order of the authorities below in redrawing the profit and loss account and whether such action of redrawing the profit and loss account is permissible in law? 3) The principal grievance as espoused by the assessee before the authorities below is that the assessee is entitled to adopt the rates of depreciation as provided under the Income Tax Rules, 1962 (in short the Rules) in the process of drawing up profit and loss account as required to be done under sub-section 1(a) of 115J of the Income Tax Act (in short the Act) for the purpose of arriving at the book profits. 4) The facts as can be gathered from the orders of the authorities below are that for the assessment year 1990- 1991, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Supreme Court in Apollo Tyres Ltd., Vs. C.I.T., Kochi (2002) 9 SCC 1 , that it is impermissible for the Assessing Officer to redraw the profit and loss account as long as the same is prepared in terms of the Companies Act, and the same is required to be adopted for the purpose of calculating the profits under Section 115-J of the Act. It may be useful to extract the Para No.8 of the judgment of the Supreme Court in the case of Apollo Tyres (1st Supra): Therefore, we are of the opinion, the Assessing Officer while computing the income under Section115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been property maintained in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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