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TMI Blog2016 (11) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... epted as per section 115JB of the Act and the increase or reduction is permissible only to the extent provided under Explanation to the said section. To put it differently, there is no jurisdiction for the Assessing Officer to go beyond the profit shown in the "profit and loss account" except to the extent provided in the Explanation to section 115JB of the Act. Book profits arrived at as per the provisions of Income-tax Act cannot be tinkered with. Therefore, substantial questions of law stand answered in favour of the Revenue and against the assessee. - ITA No. 172 of 2016 - - - Dated:- 9-11-2016 - Jayant Patel And Aravind Kumar, JJ. For the Appellant : C. K. Nanda Kumar, Advocate For the Respondent : K. V. Aravind, Standing Counsel JUDGMENT Jayant Patel, J. 1. Learned counsel appearing for the appellant has tendered a memo dated November 3, 2016 for putting on record the corrigendum for change of name and title before the Tribunal. The same is taken on record. 2. The appellant-assessee has preferred the present appeal by raising the following substantial questions of law : (a) Whether the Tribunal was right in characterising both capital rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red with the view of the Assessing Officer by relying upon the decision of the apex court in the case of Apollo Tyres Ltd. v. CIT reported in [2002] 255 ITR 273 (SC) and found that book profits arrived at as per the provisions of Income-tax Act cannot be tinkered with. The matter was further carried in an appeal before the Tribunal and the Tribunal in the conclusion, at paragraph 7, observed thus : 7. We have considered the rival submissions as well as the relevant material on record. The amount of ₹ 43 lakhs pertains to remission of liability under one-time settlement of outstanding loan with ING Vysya Bank. The assessee has prepared its profit and loss account by including this amount as income. However, the assessee has contended that this amount should be excluded for the purpose of computing book profits under section 115JB of the Act. The asses see has placed reliance on various judgments as referred to above. We note that the ratio of the decisions relied upon by the assessee is based on the premise that if an item of income or expenditure is required as per Part II of Schedule VI to the Companies Act disclosed in the profit and loss account and has been disclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income-tax (Appeals) has rejected the claim of the assessee by following the judgment of the hon'ble Supreme Court in the case of Apollo Tyres (supra) as well as the hon'ble Bombay High Court in the case of CIT v. HCL Comnet Systems and Services Ltd. [2008] 305 ITR 409 (SC). Accordingly, in the facts and circumstances of the case as well as above discussion, we do not find any error or illegality in the impugned order of the Commissioner of Income-tax (Appeals). The Tribunal accordingly dismissed the appeal. In the circumstances, present appeal before this court is filed. 7. At this stage, we may usefully refer to the decision of the apex court in the case of Apollo Tyres Ltd. v. CIT reported in [2002] 255 ITR 273 (SC) ; [2002] 9 SCC 1 wherein at paragraphs 7 and 8 it was observed thus (page 279 of 255 ITR) : The above speech shows that the Income-tax authorities were unable to bring certain companies within the net of Income-tax because these companies were adjusting their accounts in such a manner as to attract no tax or very little tax. It is with a view to bring such of these companies within the tax net that section 115J was introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section empowers the authority under the Income-tax Act to probe into the accounts accepted by the authorities under the Companies Act. If the statute mandates that income prepared in accordance with the Companies Act shall be deemed income for the purpose of section 115J of the Act, then it should be that income which is acceptable to the authorities under the Companies Act. There cannot be two incomes one for the purpose of the Companies Act and another for the purpose of Income-tax both maintained under the same Act. If the Legislature intended the Assessing Officer to reassess the company's income, then it would have stated in section 115J that 'income of the company as accepted by the Assessing Officer'. In the absence of the same and on the language of section 115J, it will have to be held that the view taken by the Tribunal is correct and the High Court has erred in reversing the said view of the Tribunal. Therefore, we are of the opinion, the Assessing 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 maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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