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TMI Blog2016 (7) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions stated supra, we are of the view that the substantial questions of law involved in the instant appeal requires to be suitably framed and therefore, in exercise of powers conferred under Sub-Section 3 of Section 260 A of the Income Tax Act, 1961, the following substantial question of law is framed. “Whether Lease Equalisation Reserve and Special Depreciation Reserve would fall under clause 'g' to the explanation to the second provisio of Section 115 JA of the Income Tax Act.” To adjudge the above issue, we are also of the view that the matter requires to be remanded to the Assessing officer. - Tax Case Appeal No. 845 of 2007 - - - Dated:- 5-7-2016 - S. Manikumar And D. Krishnakumar, JJ. For the Appellant : Mr.P.J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the material on record, vide order, dated 1/10/2002, in Appeal No.506/2001-2002, the Commissioner of Income Tax (Appeals) III, confirmed the order of Assessing Officer with relation to NPA and a sum of ₹ 21,13,705/- was over due on the ground that income accrues when it becomes due. The Commissioner of Income-Tax (Appeals) III, also reversed the order of the Assessing Officer and so far as Lease Equalisation Reserve of ₹ 42,55,549/- and Special Depreciation Reserve of ₹ 54,76,039/- on the grounds that, these reserves are ascertained liability and it is only a charge on profits and need not be added back to the book profits, thus accepting the contention of the assessee Commissioner of Income Tax (Appeals) III, partly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the mercantile system of accounting? 6. Whether in facts and circumstances of the case, the Tribunal was correct in adding the sums of Lease Equalisation Reserve and Special Depreciation Reserve to Book Profits, when these were merely a charge on profits of the Company? 7. On this day, when the matter came up for hearing, Mr.P.J.Rishikesh, learned counsel appearing for the assessee, as well as Mr.M.Swaminathan, learned Senior Standing Counsel for the Income Tax Department submitted that on the date when the Tribunal decided the lis between the parties, decision in TVS Finance and Services Ltd., Jayalakshmi Estates Vs. The Joint Commissioner of Income Tax Special Range - XI reported in (2009) 318 ITR 435 (Mad) was not rendered. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to Section 115 JA of the Income Tax Act, 1961 requires to be addressed, and adjudged by the assessing Officer. 12. In the light of the subsequent amendment with effect from 1/4/1998, now brought before this Court, and the submissions stated supra, we are of the view that the substantial questions of law involved in the instant appeal requires to be suitably framed and therefore, in exercise of powers conferred under Sub-Section 3 of Section 260 A of the Income Tax Act, 1961, the following substantial question of law is framed. Whether Lease Equalisation Reserve and Special Depreciation Reserve would fall under clause 'g' to the explanation to the second provisio of Section 115 JA of the Income Tax Act. 13. To adjudge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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