9911796707
TMI Blog1999 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... utation filed along with the return of income, the assessee showed book profit at Rs. 5,71,347 and an adjusted book profit of Rs. 1,09,508 after deducting a sum of Rs. 4,61,839 which according to the assessee was the aggregate book loss relating to earlier years. The assessee accordingly showed taxable profit under section 115J at 30 per cent. of Rs. 1,09,508 i.e., Rs. 32,852. The assessee claimed for deduction of past losses from the book profit of the relevant previous year that was based on clause (iv) of the Explanation to section 115J as per which the book profit was to be lessened by the amount of the loss or the amount of depreciation that would be required to be set off against the profit of the relevant previous year as if the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted in arriving at the book profit of the next year. The assessee's contention is not found to be tenable in view of the relevant provisions contained is section 115J of the Income-tax Act, 1961, which have been discussed in detail above. The taxable profit under section 115J of the Income-tax Act, 1961, is accordingly being taken at Rs. 1,71,404. Total income Rs. 1,71,404 or say Rs. 1,71,400. Finally penalty proceedings under section 140A(3) initiated separately. Assessed under section 143(3)/115J of the Income-tax Act, 1961, as above. . . ." On appeal, the Commissioner of Income-tax (Appeals) (hereinafter referred to as the CIT(A) "for short"), held that the Assessing Officer fell into error in not allowing set off and in not adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is liable to pay advance tax under the statute. The Tribunal accordingly allowed the appeal of the Revenue. The assessee made an application before the Appellate Tribunal under section 256(1) of the Act praying for a reference to the High Court the question of law raised therein. The Appellate Tribunal by its order dated August 25, 1997, drew up a statement of the case and referred the following two questions of law for the opinion of the High Court : "1. Whether on the facts and under the circumstances of the case, Income-tax Appellate Tribunal was right in holding that interest under sections 234B and 234C is chargeable even in a case where tax liability arises only by applicability of the provisions of section 115J of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 205. The language of clause (b) of the proviso to section 205(1) is clear. It applies to those cases, where the depreciation has been provided in accordance with the provisions of sub-section (1) of section 205. The depreciation is provided for in the profit and loss account. The loss is arrived at after taking into account the depreciation provided. It is, therefore, clear that the word 'loss' as used in proviso clause (b) to section 205(1) signifies the amount arrived at after taking into account the amount of depreciation and it has to be so read and under stood in the context of section 115J of the Income-tax Act, 1961". The decision in V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508 (AP), is accordingly reversed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be appropriate and an imperative to assume all those facts on which alone the fiction would effectively work. In support of the contention, Mr. Joshi referred to the decision of the Supreme Court in Gannon Dunkerley and Co. v. State of Rajasthan [1993] 88 STC 204 ; [1993] 1 SCC 365. Section 207 of the Act envisions that tax shall be payable in advance, during any financial year on current income in accordance with the scheme provided in sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215(5) of the Act spelled out what is the "assessed tax", i. e., the tax determined on the basis of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it . . . . The statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs." While interpreting the deeming provision contained in section 43 of the Indian Income-tax Act, 1922, the Privy Council held that under the circumstances set out therein an agent was also chargeable to income-tax as of an assessee. In CIT v. Bombay Trust Corporation, AIR 1930 PC 54, Viscount Dunedin in the aforesaid case observed : "Now when a person is 'deemed to be' something the only meaning possible is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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