Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act 1961 - s.115JB(2) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Income Tax Act, 1961 (43 of 1961) |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961 - s.115JB(2)- Explanation, Clause (i) read with proviso - Appellant-assessee had revalued its c fixed assets as on 31st March, 2000 (relevant to assessment year 2000-01) - Resultant surplus stood added to the cost of the assets - Revaluation reserve of equivalent amount was created on the liability side - During assessment year 2001- 02, Rs.26, 11, 74,0001-, being the differential depreciation, transferred out of revaluation reserve and credited to P & L Account which the A.O. disallowed and consequently said sum of Rs. 26, 11, 7 4, 0001- stood added back to the net profits. Challenge to, by assessee - Held: Clause (i) of the explanation to s. 115JB(2) mandates reduction from the net profits the amount(s) withdrawn from the reserves earlier created, provided such amount(s) is credited to P & L Account. Adjustment made in the P & L Account was primarily in the nature of contra adjustment in the P & L Account and not a case of effective credit in the P & L Account (as contemplated in clause (i) of Explanation) - Assessee credited amount to the extent of the additional depreciation from the revaluation reserve only to present a more healthy balance sheet to its shareholders enabling the assessee possibly to pay out a good dividend - The proviso to clause (i) of the Explanation to s. 115JB(2) comes in the way of the claim for reduction made by the assessee under clause (i) to the Explanation - As the amount of revaluation reserves had not gone to increase the book profits at the time it was created, the benefit of reduction cannot be allowed. MAT provisions - Object of- Held: Is to bring out the real profit of the companies - The thrust is to find out the real working results of the company |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2011 INSC 10 |
Petitioner | Indo Rama Synthetics (i) Ltd. |
Respondent | C.l.t., New Delhi |
SCR | [2011] 1 S.C.R. 853 |
Judgement Date | 2011-01-05 |
Case Number | 33 |
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