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TMI Blog2016 (5) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has come up in appeal. The questions of law formulated at the time of admission of the appeal are as follows: (1) Whether on the facts and in the circumstances of the case Tribunal was justified in holding that the Assessing Officer was not justified in making the addition, of Rs. 120.39 crores and Rs. 325.15 crores to the book profit in respect of assessment years 1997-98 and 1998-99 respectively and directing for deletion of the said amounts while computing the book profit of the assessee for the purpose of section 115J of the Income Tax Act, 1961 by disregarding that said amounts have been claimed by the assessee in earlier year and was already allowed? (2) Whether on the facts and in the circumstances of the case Tribunal was jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see claimed deduction of the aforesaid sum of Rs. 613.21 crores, the same had not been debited to the profit and loss account for the financial year 1995-96. The Assessing Officer refused to allow such deduction. The CIT(A) upheld that order. But the learned Tribunal, by its judgment and order dated October 31, 2001, reversed the orders of the Assessing Officer and the CIT(A) and allowed the entire claim of the assessee in respect of the sum of Rs. 613.21 crores. For the assessment year 1997-98, the Assessing Officer made normal computation by his order dated March 30, 2000 disallowing a sum of Rs. 120.32 crores debited by the assessee to the profit and loss account on account of refund or repayment to the depositors, being the money which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while computing the regular income in assessment year 1996-97 with the computation of book profit in assessment year 1997-98. It is settled law that the computation of total income for the purpose of Income Tax Act and the computation of book profit for the purpose of section 115JA are two separate and distinct computations. As per section 115JA, the A.O. has to make these two computations separately. First he has to compute the total income as per the provisions of the Income Tax Act. Thereafter, he has to compute the book profit as per section 115JA and work out 30% thereof. Now 30% of the book profit and the total income as computed as per the provisions of Income Tax Act is to be compared and whichever of them is higher shall be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntending that the deduction of Rs. 120.39 crores is claimed twice while computing the total income of the assessee. However, so far as the computation of book profit is concerned, the claim of deduction from the book profit is only once and not twice. In view of the above, we respectfully following the decision of Hon'ble Apex Court in the case of Apollo Tyres Ltd.(supra) hold that the A.O. was not justified in making the addition of Rs. 120.39 crores to the book profit. The same is directed to be deleted while computing the book profit of the assessee for the purpose of section 115JA of the Income Tax Act." Mr. Nizamuddin, learned Advocate appearing for the revenue, reiterated the submissions advanced before the learned Tribunal that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer while computing the income under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer 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 115J." Once there is no dispute that the books of account were maintained in accordance with law and were duly certified, the assessing officer's li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1997-98 and the following views were expressed: "As stated above, the said Explanation has provided six items, i.e., item Nos. (a) to (f) which is debited to the profit and loss account can be added back to the net profit for computing the book profit. In this case, we are concerned with item No.(c) which refers to the provision for bad and doubtful debts. The provision for bad and doubtful debts can be added back to the net profit only if item (c) stands attracted. Item (c) deals with amount(s) set aside as provision made for meeting liabilities, other than ascertained liabilities. The assessee's case would, therefore, fall within the ambit of item (c) only if the amount is set aside as provision; the provision is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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