INCOME TAX ACT, 1961
--MAT--Book profits under section 115J ComputationAssessing officer disallowed depreciation on revalued assets while computing book profit under section 115J. Commissioner (Appeals) and tribunal both observed that the effect of higher claim of depreciation on revalued assets got set-off against a like amount transferred from revaluation reserve and credited to the profit and loss account and held that within the meaning of clause (1) read with proviso thereto of the Explanation to section 115J, assessee was entitled to deduction of equal amount from the book profits. Held: Rightly so as the Tribunal did not commit any error in law in allowing the depreciation on the revaluation reserve, which was a prescribed and statutory method of accounting and by which book profits did not get reduced, giving any added benefit to the companies including Minimum Alternate Tax MAT) companies.
Income Tax Act, 1961 Section 115J
In the Allahabad High Court
Sunil Ambwani & Aditya Nath Mittal, JJ.
CIT v. Rampur Distillery & Ch-emicals Co. Ltd.
IT Appeal No. 88 of 2000
A.Y. 1990-91
8 November, 2012
Appellant by : Dhananjay Awasthi
Respondent by : Rupesh Jain and R. S. Agrawal
1. This income tax appeal preferred by the Commissioner of Income Tax, Bareilly under section 260-A of the Income Tax Act, 1961 arises out of judgment and order dated 28-9-1999 passed by the Income Tax Appellate Tribunal in ITA No.4126/Del/93 relating to the assessment year 1990-91.
2. The appeal was admitted on 11-1-2007 on the questions of law as follows :
'1. Whether on the facts and circumstances of the case, the Tribunal was justified in law in upholding the order of Commissioner (Appeals) who observed that the effect of higher claim of depreciation on the revalued assets to the extent of Rs. 17,26,809 get set off against a like amount of Rs. 17,26,809 transferred from the revaluation reserve and credited to the profit & loss account, while it is not so, and depreciation on revalued asset is not permissible for computation of income under section 115J of Income Tax Act, 1961?