CIT v. Century Textiles and Industries Ltd.

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The Tax Publishers2017 TaxPub(DT) 0301 (Bom-HC) CIT v. Century Textiles and Industries Ltd. INCOME TAX ACT, 1961 --MAT--Book profit under section 115JBAdjustments in respect of arrears of depreciation----Book profit as prepared and certified in accordance with the provisions of Companies Act has to be accepted and cannot be altered to determine book profit under section 115JB.--Assessee had debited to its profit and loss account certain amount being arrears of depreciation for earlier assessment years 2000-01 and 2001-02. AO added same to audited book-profits to determine book profits for purpose of section 115JB ignoring explanation of assessee that book profit as prepared and certified in accordance with provisions of Companies Act had to be accepted in view of Apex Court decision in CIT v. Apollo Tyres Ltd. 255 ITR 273 (SC). CIT(A) allowed assessee's appeal. Revenue failed before Tribunal. *Held:* (i) Tribunal was justified in deleting adjustments made by AO. Issue stood concluded by decision of Apex Court and decision of this court. (ii) Second question framed proceeded on erroneous basis that Tribunal allowed claim by relying on clause (iia) of Explanation to section 115JB. No substantial question of law arose. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2017 TaxPub(DT) 0301 (Bom-HC)

CIT v. Century Textiles and Industries Ltd.

INCOME TAX ACT, 1961

--MAT--Book profit under section 115JBAdjustments in respect of arrears of depreciation----Book profit as prepared and certified in accordance with the provisions of Companies Act has to be accepted and cannot be altered to determine book profit under section 115JB.--Assessee had debited to its profit and loss account certain amount being arrears of depreciation for earlier assessment years 2000-01 and 2001-02. AO added same to audited book-profits to determine book profits for purpose of section 115JB ignoring explanation of assessee that book profit as prepared and certified in accordance with provisions of Companies Act had to be accepted in view of Apex Court decision in CIT v. Apollo Tyres Ltd. 255 ITR 273 (SC). CIT(A) allowed assessee's appeal. Revenue failed before Tribunal. Held: (i) Tribunal was justified in deleting adjustments made by AO. Issue stood concluded by decision of Apex Court and decision of this court. (ii) Second question framed proceeded on erroneous basis that Tribunal allowed claim by relying on clause (iia) of Explanation to section 115JB. No substantial question of law arose.