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TMI Blog2009 (4) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... A PANDIAN and JUSTICE M.M.SUNDRESH Mr. J. Naresh Kumar for the appellant. JUDGMENT The Judgment of the Court was delivered by K. RAVIRAJA PANDIAN, J. - The revenue before this Court in this appeal against the order of the Income Tax Appellate Tribunal, dated 27.08.2008 passed in ITA No.1016/Mds/2006 in respect of the assessment year 1998-99. 2. The assessee is a Public Limited Company, manufacturing Fabrics and Garments filed its return of income for the assessment year 1998-99 on 30.11.1998 admitting a total income of Rs.1,29,70,280/- arrived at under Section 115JA of the Income Tax Act. The return was processed on 04.12.1998 and a prima-facie adjustment relating to deduction under Section 80HHC was made by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, revised the order by observing as follows:- "On perusal of the relevant records and on consideration of the facts of the case and in the light of the language contained in Clause (vii) of Explanation of Section 115JA of the Act, it was found that the deduction as above was to be allowed in reference to the 'profits of the business' as defined in clause (baa) to Explanation of Section 80-HHC of the Act and the ratio of the decision in the case of G.T.N.Textiles (supra), having been rendered in the context of clause (iii) of Explanation to section 115JA of the Act, has no application while working out deduction in terms of clause (vii) of Explanation to section 115JA of the Act. By not doing so, the Assessing Officer had work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks profits under Section 115JA of the Income Tax Act, 1961 is valid? 2. Whether on the facts and in the circumstances of the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessment order was passed by the assessing officer is erroneous and quash the order passed by the Commissioner of Income Tax under section 263 of the Income Tax is valid?". 9. In respect of the first question of law, the Division Bench of this Court in which one of us (K.Raviraja Pandian,J) was a party in the case of Commissioner of Income Tax vs. Rajanikant Schnelder and Associates P. Ltd., reported in 302 ITR 22) has observed as follows:- "4. We are not able to subscribe our view to the grounds taken in the appeal that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and loss account except to the extent provided in the Explanation. The use of the words "in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act" in Section 115J was made for the limited purpose of empowering the Assessing Officer to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, the Assessing Officer has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, which obligate the company to maintain its accounts in a manner provided by that Act and the same to be scrutinized and certified by the statutory auditors and approved by the company in the general meeting and thereafter to be filed befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the conclusion arrived at by the Tribunal cannot be complained of". Hence, following the same, the first question of law is answered against the revenue. 10. In view of our finding in the first question of law against the revenue, the second question of law virtually becomes academic. Despite we will have to say the following few words in respect of the order passed by the Commissioner invoking power under Section 263 of the Income-tax Act. 11. After referring to the view taken by the Income-tax Appellate Tribunal, Hyderabad in the case of STARCHIK SPECIALITIES LTD. VS. D.C.I.T. and extracting certain portion thereof, the Commissioner held that "with utmost respect to the Income-tax Appellate Tribunal I am to mention that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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