9911796707
TMI Blog2015 (6) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... y to be assessed u/s 115JB(2) in the light of Explanation-1, Clause (vii) of Section 115JB. The Cross-objection of the assessee is delayed by 317 days. The assessee has furnished an application for condonation of delay which is duly supported by the affidavit of Shri Chandrakant R. Patel, Managing Director of the assessee. In the affidavit, it is mentioned by the Managing Director of the assesses that since the CIT(A) has allowed the appeal in favour of the assessee with respect to computation u/s 115JB, the assessee did not prefer appeal or cross-objections. However, when the notice of hearing of the appeal is served upon the assessee, the assessee engaged the Counsel for appearing before the ITAT, the Counsel advised to file the cross-objection and thereafter, the cross-objection was immediately filed. 4. The ld. Counsel, who appeared at the time of hearing before us, submitted that the assessee is a layman and he is not aware about the intricacy of provisions of Income-tax Act. He also submitted that the point raised in the cross-objection was also raised before the CIT(A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on the facts of the case in confirming the action of ld. AO in holding that provisions of clause (vii) to the Explanation 1 of S.115JB(2) of the Act are not applicable to the facts of the case of the assessee and thus not allowing to reduce an amount of profit of sick industrial appellant company from the net profit to determine book profit u/s 115JB of the Act as per clause (vii) to the Explanation 1 of S.115JB(2) of 8. The other ground is only in support of ground No.1 9. At the time of hearing before us, it is submitted by the ld. Counsel that the assessee is a sick unit and during the accounting year relevant to assessment year under consideration, for the first time, the net worth of the assessee company exceeded the accumulated losses. That Explanation-1, Clause (vii) provides for exclusion of profit of sick industrial company while computing book profit. The exemption is available from the assessment year in which the company becomes sick industrial unit and is available up to the year during which the net worth of the company exceeds the accumulated loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l end with the Assessment Year in which the net worth of the company exceeds the accumulated losses. It means exemption would be available upto the year in which the net worth exceeds the accumulated losses, but will not be available for subsequent years. Thus, the year in which the net worth exceeds the accumulated losses, will be last year of exemption under clause (vii). 9. In view of above, we hold that for the year under consideration, the amount of profit of sick industrial undertaking is to be excluded from the book profit. It is not in dispute that entire profit of the assessee company is from sick industrial undertaking. We, accordingly allow ground No.1 of the assessee's appeal. Once it is held that the profit of the sick industrial undertaking is not chargeable to tax u/s 115(JB), the book profit (Assessment Year 2003-2004) of the assessee company would be nil because the assessee company is having only one industrial undertaking which is a sick unit. In view of the above, ground raised in Revenue's appeal as well as Ground Nos.2,3 and 4 of the assessee's a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the ld. Counsel that the Assessing Officer made addition of Rs. 2,50,14,190/- on the presumption that it was interest waived by the State Bank of Saurashtra and State Bank of Indore; the details of which is given at page No.10 of the assessment order and the same is reproduced below for ready reference. "a) Interest waived by State Bank of Saurashtra: i) Interest debited to P&L account Rs. 40,72,561/- ii) Interest debited to deferred Revenue expenditure Rs.1,27,82,606/- iii) Interest claimed as allowable Rs. 77,81,667/- b) Interest waived by State Bank of Indore Rs. 3,77,356/- ---------------- Rs.2,50,14,190/- ===========" 17. He stated that the CIT(A) sustained addition only in respect of Rs. 77,81,667/- and deleted the balance addition. He also stated that to the best of his knowledge, the Revenue has not filed any appeal against part deletion of the addition by the CIT(A). With respect to Rs. 77,81,667/-, he submitted that this amount was claimed by the assessee as deduction and it was not waived. He also referred to his written submission which is&n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
